<PAGE> 1
===============================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
/x/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996.
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period to .
Commission file number 0-14737
TRENWICK GROUP INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1152790
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Metro Center
One Station Place
Stamford, Connecticut 06902
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (203) 353-5500
None
(Former name, former address and former fiscal year,
if changed since last report)
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 .......
Indicate the number of shares outstanding of each of the issuer's classes of
common stock.
<TABLE>
<CAPTION>
Class Outstanding at July 31, 1996
----- ----------------------------
<S> <C>
Common Stock, $.10 par value 6,702,312
</TABLE>
===============================================================================
<PAGE> 2
TRENWICK GROUP INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I. Financial Information
Consolidated Balance Sheet
June 30, 1996 and December 31, 1995 3
Consolidated Statement of Income
Three and Six Months Ended June 30, 1996 and 1995 4
Consolidated Statement of Changes in Stockholders' Equity
Three and Six Months Ended June 30, 1996 and 1995 5
Consolidated Statement of Cash Flows
Six Months Ended June, 1996 and 1995 6
Notes to Consolidated Financial Statements 7-8
Management's Discussion and Analysis
of Financial Condition and Results of Operations 9-12
PART II. Other Information
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
<PAGE> 3
TRENWICK GROUP INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- ------------
(dollars in thousands)
<S> <C> <C>
Assets
Fixed maturity investments available for sale at
fair value (amortized cost: $647,809 and $609,751) $ 653,211 $ 633,525
Equity securities available for sale at
fair value (cost: $14,557 and $16,807) 18,013 19,719
Cash and cash equivalents 8,327 6,760
--------- ---------
Total investments and cash 679,551 660,004
Accrued investment income 10,419 10,198
Receivables from ceding insurers 67,695 48,979
Reinsurance recoverable balances, net 72,639 68,449
Deferred policy acquisition costs 22,283 16,725
Net deferred income taxes 20,230 13,585
Other assets 3,267 2,990
--------- ---------
Total assets $ 876,084 $ 820,930
========= =========
Liabilities and Stockholders' Equity
Liabilities:
Unpaid claims and claims expenses $ 443,306 $ 411,874
Unearned premium income 74,157 56,050
Convertible debentures 103,500 103,500
Other liabilities 9,653 8,730
--------- ---------
Total liabilities 630,616 580,154
--------- ---------
Stockholders' equity:
Preferred stock, $.10 par value,
1,000,000 shares authorized; none outstanding
Common stock, $.10 par value, 15,000,000 shares
authorized; 6,702,312and 6,590,411 shares outstanding 670 659
Additional paid-in capital 93,777 89,920
Retained earnings 146,334 133,949
Net unrealized appreciation of investments,
net of income taxes 5,758 17,346
Deferred compensation under stock award plan (1,071) (1,098)
--------- ---------
Total stockholders' equity 245,468 240,776
--------- ---------
Total liabilities and stockholders' equity $ 876,084 $ 820,930
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
TRENWICK GROUP INC.
CONSOLIDATED STATEMENT OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
----------------------- ----------------------
1996 1995 1996 1995
---- ---- ---- ----
(in thousands except per share data)
<S> <C> <C> <C> <C>
Revenues:
Net premiums earned $ 53,376 $ 43,698 $101,067 $ 88,162
Net investment income 10,185 9,193 20,054 17,737
Net realized investment gains (losses) (11) 52 39 150
-------- -------- -------- --------
Total revenues 63,550 52,943 121,160 106,049
-------- -------- -------- --------
Expenses:
Claims and claims expenses incurred 32,775 28,586 61,974 59,593
Policy acquisition costs 14,716 10,525 26,958 19,895
Underwriting expenses 3,343 2,938 7,371 5,804
Interest expense 1,625 1,627 3,249 3,251
-------- -------- -------- --------
Total expenses 52,459 43,676 99,552 88,543
-------- -------- -------- --------
Income before income taxes 11,091 9,267 21,608 17,506
Income taxes 2,764 1,927 5,099 3,662
-------- -------- -------- --------
Net income $ 8,327 $ 7,340 $ 16,509 $ 13,844
======== ======== ======== ========
PRIMARY EARNINGS PER SHARE $ 1.22 $ 1.09 $ 2.42 $ 2.07
======== ======== ======== ========
Weighted average shares outstanding 6,817 6,710 6,818 6,700
======== ======== ======== ========
FULLY DILUTED EARNINGS PER SHARE
(assuming conversion of dilutive
convertible debentures) $ 1.05 $ .95 $ 2.08 $ 1.81
======== ======== ======== ========
Weighted average shares outstanding 8,962 8,844 8,953 8,834
======== ======== ======== ========
Dividends per common share $ .31 $ .28 $ .62 $ .56
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
TRENWICK GROUP INC.
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
(dollars in thousands)
<S> <C> <C> <C> <C>
Stockholders' equity, beginning of period $ 239,338 $ 204,029 $ 240,776 $ 188,213
Common stock, $.10 par value, and additional
paid-in-capital:
Exercise of employer stock options
(119,852, 3,000, 127,852 and 22,500 shares) 3,438 59 3,596 247
Income tax benefit resulting from
excess compensation expenses allowable
for income tax purposes 959 -- 1,053 82
Restricted common stock awarded
(241, 16,650, 6,436 and 21,304 shares) 13 728 333 933
Restricted common stock awards cancelled
(2,100 shares) (91) -- (91) --
Common stock purchased and retired
(16,803, 20,287 and 3,056 shares) (843) -- (1,023) (134)
Retained earnings:
Net income 8,327 7,340 16,509 13,844
Cash dividends (2,078) (1,815) (4,124) (3,624)
Net unrealized appreciation (depreciation) of
investments available for sale:
Change in unrealized appreciation (depreciation) (5,861) 13,851 (17,828) 30,630
Change in applicable deferred income taxes 2,052 (4,848) 6,240 (10,720)
Deferred compensation under stock award plan:
Restricted common stock awarded (13) (728) (333) (933)
Restricted commom stock awards cancelled 91 -- 91 --
Compensation expense recognized 136 134 269 212
--------- --------- --------- ---------
Stockholders' equity, end of period $ 245,468 $ 218,750 $ 245,468 $ 218,750
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
TRENWICK GROUP INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
-----------------------
1996 1995
(in thousands)
<S> <C> <C>
Cash flows from operating activities:
Premiums collected $ 79,066 $ 70,205
Ceded premiums paid (3,109) (4,690)
Claims and claims expenses paid (43,994) (42,468)
Claims and claims expenses recovered 3,175 4,635
Underwriting expenses paid (7,713) (5,872)
-------- --------
Cash provided by underwriting activities: 27,425 21,810
Net investment income received 20,573 20,015
Interest and other expenses paid (3,085) (3,131)
Income taxes paid (4,881) (5,923)
-------- --------
Cash provided by operating activities 40,032 32,771
-------- --------
Cash flows for investing activities:
Purchases of fixed maturity investments (72,910) (81,647)
Sales of fixed maturity investments 7,936 25,656
Maturities of fixed maturity investments 26,207 20,382
Purchases of equity securities (115) (100)
Sales of equity securities 2,375 --
Additions to premises and equipment (407) (270)
-------- --------
Cash used for investing activities (36,914) (35,979)
-------- --------
Cash flows for financing activities:
Issuance of common stock 3,596 247
Repurchase of common stock (1,023) (134)
Dividends paid (4,124) (3,624)
-------- --------
Cash used for financing activities (1,551) (3,511)
-------- --------
Increase(decrease) in cash and cash equivalents 1,567 (6,719)
Cash and cash equivalents, beginning of period 6,760 9,784
-------- --------
Cash and cash equivalents, end of period $ 8,327 $ 3,065
======== ========
</TABLE>
The accompanying notes are an integral part of these statements.
6
<PAGE> 7
TRENWICK GROUP INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation:
The interim consolidated financial statements includes those of Trenwick
Group Inc. and its subsidiaries and have been prepared in conformity with
generally accepted accounting principles applied on a basis consistent
with prior periods. Certain items in the financial statements have been
reclassified to conform with the 1996 presentation.
Management is required to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent
assets and liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
The interim consolidated financial statements are unaudited; however, in
the opinion of management, the interim consolidated financial statements
include all adjustments, consisting only of normal recurring adjustments,
necessary for a fair statement of the results for the interim periods.
These interim statements should be read in conjunction with the 1995
audited financial statements and related notes.
2. Reinsurance:
Trenwick purchases reinsurance to reduce its exposure to catastrophe
losses and the frequency of large losses in all lines of business.
Trenwick, however, remains liable in the event that its retrocessionaires
do not meet their contractual obligations. The effects of reinsurance on
premiums written, premiums earned and claims and claims expenses incurred
is as follows (in thousands):
<TABLE>
<CAPTION>
Premiums Written
---------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Assumed $ 65,503 $ 54,635 $ 129,534 $ 107,932
Ceded (5,232) (4,089) (10,380) (8,009)
--------- --------- --------- ---------
Net $ 60,271 $ 50,546 $ 119,154 $ 99,923
========= ========= ========= =========
</TABLE>
7
<PAGE> 8
<TABLE>
<CAPTION>
Premiums Earned
---------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Assumed $ 58,592 $ 47,810 $ 111,427 $ 96,195
Ceded (5,216) (4,112) (10,360) (8,033)
--------- --------- --------- ---------
Net $ 53,376 $ 43,698 $ 101,067 $ 88,162
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Claims and Claims Expenses Incurred
---------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
------------------------- -------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Assumed $ 39,579 $ 34,058 $ 75,927 $ 70,646
Ceded (6,804) (5,472) (13,953) (11,053)
-------- -------- -------- --------
Net $ 32,775 $ 28,586 $ 61,974 $ 59,593
======== ======== ======== ========
</TABLE>
3. Stock Options and Benefit Plans:
For the six months ended June 30, 1996, Trenwick awarded key employees an
aggregate of 6,436 shares of common stock under the terms of the 1989
Stock Plan, valued at an average of $51.74 per share (approximately
$333,000). Trenwick is recognizing compensation expense determined by the
value of the shares, amortized over a five year vesting period. During the
six month period, 20,287 shares were repurchased at an average of $50.43
per share (approximately $1,023,000) in connection with the satisfaction
of withholding taxes payable upon the vesting of shares previously awarded
under the plan.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION
AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
Trenwick Group Inc. ("Trenwick") is a holding company whose principal
subsidiary, Trenwick America Reinsurance Corporation ("Trenwick America Re")
reinsures property and casualty risks written by U.S. insurance companies.
Substantially all of Trenwick America Re's business is produced by reinsurance
brokers. Trenwick America Re divides its business into three categories: treaty,
specialty and facultative. In addition, under a strategic reinsurance agreement
with PXRE Reinsurance Company ("PXRE Re"), Trenwick America Re assumes
approximately 15% of PXRE Re's property business.
OPERATING RESULTS
Trenwick Group Inc. reported an increase in its second quarter consolidated net
income of 13% to $8.3 million or $1.22 per share compared to $7.3 million or
$1.09 per share in the second quarter of 1995. Consolidated net income was $16.5
million or $2.42 per share in the first half of 1996 compared to $13.8 million
or $2.07 per share in the first half of 1995. Fully diluted earnings per share
were $1.05 and $2.08 in the second quarter and first half of 1996, respectively,
compared to $.95 and $1.81 for the same periods in 1995.
Operating income (net income excluding after-tax realized investment gains and
losses) was as follows (in thousands, except per share data):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------------- ------------------------------
1996 1995 %Change 1996 1995 %Change
---- ---- ------- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
Operating income $8,335 $7,306 14% $16,484 $13,746 20%
Operating income
per share:
Primary $ 1.22 $ 1.09 12% $ 2.42 $ 2.05 18%
Fully diluted $ 1.05 $ .95 11% $ 2.08 $ 1.79 16%
</TABLE>
Realized after-tax investment losses in the second quarter of 1996 were $8,000
compared to realized after-tax investment gains of $34,000 in the second quarter
of 1995. For the first half of 1996, realized after-tax investment gains were
$25,000 compared to $98,000 or approximately $.01 per share for the same period
in 1995.
9
<PAGE> 10
PREMIUMS
Trenwick's net premiums written increased 19% to $60.3 million in the second
quarter of 1996 compared to $50.5 million in the same period in 1995. Net
premiums written in the first half of 1996 also increased 19% to $119.2 million
compared to the same period in 1995. The distribution of the Company's net
premiums written by type was as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------------------------- -------------------------------------
1996 1995 %Change 1996 1995 %Change
---- ---- ------- ---- ---- -------
<S> <C> <C> <C> <C> <C> <C>
CASUALTY
Treaty $40,785 $28,849 41% $78,136 $54,605 43%
Specialty 11,569 13,478 (14) 21,349 25,071 (15)
Facultative 1,592 1,677 (5) 2,946 3,139 (6)
-------- -------- --- -------- -------- ---
53,946 44,004 23 102,431 82,815 24
PROPERTY 6,325 6,542 (3) 16,723 17,108 (2)
-------- -------- --- -------- -------- ---
Total $60,271 $50,546 19% $119,154 $99,923 19%
======== ======== === ======== ======== ===
</TABLE>
Trenwick's premium growth in the second quarter and first half of 1996 resulted
from an increase in casualty treaty business. This growth was primarily driven
by business associated with the senior underwriting executives hired in 1995,
including the previously reported strategic reinsurance agreement with
Transatlantic Reinsurance Company. This business was developed through existing
and new relationships with various reinsurance brokers. Specialty business
declined as a result of the non-renewal of certain accounts which did not meet
the Company's pricing standards and a decline in business written by certain
ceding companies.
New casualty business increased 60% and 65% in the quarter and first half of
1996 over the same periods in 1995 and represented approximately 32% and 29% of
total premium writings during the periods. Continuing casualty business
increased 10% and 11% in the quarter and for the first half of 1996 over the
same period in 1995, as a result of increases in participations in renewal
transactions and growth in the original business written by several ceding
companies. Continuing casualty business represented 57% of the total premium
writings during the periods. The Company's property business, representing 11%
and 14% of total premium writings for the quarter and first half of 1996,
declined marginally.
10
<PAGE> 11
UNDERWRITING EXPERIENCE
The combined ratio is one means of measuring the profitability of a property and
casualty company. The combined ratio reflects underwriting experience, but does
not reflect income from investments or provisions for income taxes. A combined
ratio below 100% indicates profitable underwriting, and a combined ratio
exceeding 100% indicates unprofitable underwriting. Although a reinsurer may
have unprofitable underwriting results, the reinsurer may still be profitable
because of investment income earned on the accumulated invested assets.
The following table sets forth Trenwick's combined ratios and the components
thereof calculated on a GAAP basis for the period indicated, together with
Trenwick America Re's combined ratio calculated on a statutory basis:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Claims and claims expense ratio 61.4% 65.4% 61.3% 67.6%
---- ---- ---- ----
Expense ratio:
Policy acquisition expense ratio 27.6 24.1 26.7 22.6
Underwriting expense ratio 6.3 6.7 7.3 6.6
---- ---- ---- ----
Total expense ratio 33.9% 30.8% 34.0% 29.2%
---- ---- ---- ----
Combined ratio (GAAP basis) 95.3% 96.2% 95.3% 96.8%
---- ---- ---- ----
Trenwick America Re
statutory combined ratio 95.3% 97.6% 94.6% 96.8%
---- ---- ---- ----
</TABLE>
As indicated, Trenwick's claims and claims expense ratio improved in the second
quarter and first half of 1996 compared to the same periods in 1995. The claims
and claims expense ratio in the first half of 1996 includes favorable
development of approximately $2.9 million from casualty business written in
prior years.
INVESTMENT INCOME
Net investment income of $10.2 million in the second quarter of 1996 increased
11% compared to $9.2 million for the same period in 1995. Net investment income
of $20.1 million in the first half of 1996 increased 13% compared to $17.7
million in the first half of 1995. Pre-tax yields on invested assets averaged
6.5% in both 1996 and 1995. The increase in investment income is due primarily
to the continued growth in the Company's invested asset base along with an
increase in operating cash flow.
11
<PAGE> 12
The taxable and non-taxable components of the Company's net investment income,
net of investment expenses, were as follows (in thousands):
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Taxable $ 6,548 $ 5,757 $12,787 $11,029
Non-taxable 3,637 3,436 7,267 6,708
------- ------- ------- -------
$10,185 $9,193 $20,054 $17,737
======= ======= ======= =======
Net investment income, after-tax $ 7,929 $7,215 $15,650 $13,975
======== ====== ======= =======
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
As of June 30, 1996, Trenwick's consolidated investments and cash totaled $679.6
million, as compared to $660.0 million at December 31, 1995. The fair value of
the Company's fixed maturity portfolio exceeded amortized cost of $647.8 million
and $609.8 million by $5.4 million and $23.8 million at June 30, 1996 and
December 31, 1995, respectively. At June 30, 1996 and at December 31, 1995, the
fair value of the Company's equity securities exceeded cost of $18.0 million and
$19.7 million by $3.4 million and $2.9 million, respectively.
As of June 30, 1996, Trenwick's consolidated stockholders' equity totaled $245.5
million or $36.63 per share, as compared to $240.8 million or $36.54 per share
at December 31, 1995. This increase resulted from earnings in the period reduced
by a decrease in the market value of the Company's fixed maturity and equity
investments. Since December 31, 1995, the unrealized appreciation of the
Company's fixed maturity and equity investments declined $11.6 million, net of
tax, or $1.73 per share, primarily as a result of the increase in interest rates
since December 31, 1995.
Statutory surplus of Trenwick America Re was $270.6 million as of June 30, 1996,
compared to $257.6 million as of December 31, 1995.
Cash flow from operations of $40.0 million in the first half of 1996 increased
approximately 22% compared to cash flow from operations of $32.8 million in the
first half of 1995. The increase in cash flow from operations reflected an
overall increase in premium writings.
Trenwick declared a second quarter dividend of $.31 per share in 1996, compared
to $.28 in the second quarter of 1995.
12
<PAGE> 13
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
A total of 5,769,285 shares, or 87.4% of the 6,601,122 shares of common stock
outstanding on the March 29, 1996 record date, were represented at the Company's
Annual Meeting of Stockholders held on May 23, 1996. Voting results were as
follows:
On the proposal to elect Messrs. Anthony S. Brown, Donald E. Chisholm, Neil Dunn
and P. Anthony Jacobs to serve in Class III until 1999, each of Messrs. Brown,
Dunn and Jacobs was elected by an affirmative vote of 5,760,875 shares, with
8,410 shares withheld, and Mr. Chisholm was elected by an affirmative vote of
5,759,594 shares, with 9,691 shares withheld.
On the proposal to ratify the appointment of Price Waterhouse LLP as independent
accountants for the year ending December 31, 1996, there were 5,760,865 shares
voted in favor, 220 shares opposed, 8,200 shares abstaining and no broker
non-votes.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
11.0 Computation of Earnings Per Share
27.0 Financial Data Schedule
b) Reports on Form 8-K
None
13
<PAGE> 14
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.
TRENWICK GROUP INC.
-----------------------------------
(Registrant)
Date: August 13, 1996 JAMES F. BILLETT, JR.
---------------- -----------------------------------
James F. Billett, Jr.
Chairman, President and
Chief Executive Officer
Date: August 13, 1996 ALAN L. HUNTE
--------------- -----------------------------------
Alan L. Hunte
Vice President, Chief Financial Officer
and Treasurer
14
<PAGE> 1
TRENWICK GROUP INC.
Exhibit 11.0 -- COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
-------------------- --------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY
Average shares outstanding 6,673 6,469 6,634 6,460
Weighted average shares of common stock
equivalents associated with
stock options, net 144 241 184 240
------- ------- ------- -------
Total 6,817 6,710 6,818 6,700
======= ======= ======= =======
Net income $8,327 $7,340 $16,509 $13,844
======= ======= ======= =======
PER SHARE AMOUNT $1.22 $1.09 $2.42 $2.07
======= ======= ======= =======
FULLY DILUTED
Average shares outstanding 6,673 6,469 6,634 6,460
Weighted average shares of common stock
equivalents associated with
stock options, net 155 241 185 240
Assumed conversion of 6% convertible
debentures 2,134 2,134 2,134 2,134
------- ------- ------- -------
Total 8,962 8,844 8,953 8,834
======= ======= ======= =======
Net income $8,327 $7,340 $16,509 $13,844
Add 6% convertible conversion debenture interest
net of federal income tax effect 1,056 1,054 2,112 2,107
------- ------- ------- -------
Total $9,383 $8,394 $18,621 $15,951
======= ======= ======= =======
PER SHARE AMOUNT $1.05 $.95 $2.08 $1.81
======= ======= ======= =======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS CONTAINED IN THE FORM 10-Q FOR THE SIX MONTHS ENDED JUNE
30, 1996 FOR TRENWICK GROUP INC.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<DEBT-HELD-FOR-SALE> 653,211
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 18,013
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 671,224
<CASH> 8,327
<RECOVER-REINSURE> 67,695<F1>
<DEFERRED-ACQUISITION> 22,283
<TOTAL-ASSETS> 876,084
<POLICY-LOSSES> 443,306
<UNEARNED-PREMIUMS> 74,157
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 103,500
0
0
<COMMON> 670
<OTHER-SE> 244,798
<TOTAL-LIABILITY-AND-EQUITY> 876,084
101,067
<INVESTMENT-INCOME> 20,054
<INVESTMENT-GAINS> 39
<OTHER-INCOME> 0
<BENEFITS> 61,974
<UNDERWRITING-AMORTIZATION> 26,958
<UNDERWRITING-OTHER> 10,620
<INCOME-PRETAX> 21,608
<INCOME-TAX> 5,099
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,509
<EPS-PRIMARY> 2.42
<EPS-DILUTED> 2.08
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>REPRESENTS NET REINSURANCE RECOVERABLE BALANCES AFTER OFFSET OF FUNDS HELD AND
REINSURANCE BALANCES PAYABLE.
</FN>
</TABLE>
