<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended June 30, 1996
Commission file number 0-15886
The Navigators Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-3138397
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
123 William Street, New York, New York 10038
(Address of principal executive offices) (Zip Code)
(212) 406-2900
(Registrant's telephone number, including area code)
(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 as of the latest practicable date.
On August 12, 1996 there were 8,216,651 shares of common stock, $0.10 par value
issued and outstanding.
<PAGE> 2
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. FINANCIAL INFORMATION:
Balance Sheets
June 30, 1996 and December 31, 1995................................ 1
Statements of Income
Three Months Ended June 30, 1996 and
Three Months Ended June 30, 1995................................... 2
Six Months Ended June 30, 1996 and
Six Months Ended June 30, 1995..................................... 3
Statements of Cash Flows
Six Months Ended June 30, 1996 and
Six Months Ended June 30, 1995..................................... 4
Notes to Financial Statements........................................... 5
Management's Discussion and Analysis of Financial
Condition and Results of Operations................................ 6
Part II. OTHER INFORMATION.................................................. 11
<PAGE> 3
<TABLE>
<CAPTION>
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
June 30, 1996 Dec. 31, 1995
------------- -------------
Unaudited)
<S> <C> <C>
ASSETS
Investments:
Fixed maturities, available for sale, at fair value
(amortized cost: 1996, $204,560,204; 1995,
$203,468,088) $206,784,157 $210,697,423
Equity securities, available for sale, at fair value
(cost: 1996 $6,218,565;, 1995, $5,587,344) 8,832,575 7,861,813
Short-term investments, at cost which approximates
market 6,359,939 7,290,638
------------ ------------
Sub-total investments 221,976,671 225,849,874
Investment in affiliated company 2,258,348 2,277,048
------------ ------------
Total investments 224,235,019 228,126,922
Cash 675,484 7,332,698
Premiums in course of collection 29,737,402 17,971,529
Commissions receivable 5,434,181 6,048,440
Accrued investment income 3,220,790 3,349,030
Prepaid reinsurance premiums 8,545,642 9,814,146
Reinsurance receivable on paid and unpaid losses
and loss adjustment expenses 126,294,419 147,356,684
Deferred federal income tax benefit 10,226,834 8,873,030
Deferred policy acquisition costs 2,944,655 2,523,180
Other assets 3,347,659 4,156,755
------------ ------------
Total assets $414,662,085 $435,552,414
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Reserves for loss and loss adjustment expenses $251,231,252 $273,854,054
Unearned premiums 28,644,929 26,753,920
Reinsurance balances payable 6,857,821 6,411,746
Loans payable to banks 17,000,000 19,500,000
Federal income tax payable 492,566 1,243,364
Deferred state & local income taxes 945,778 1,382,881
Notes payable to shareholders 942,034 1,007,976
Accounts payable and other liabilities 4,334,609 6,322,266
------------ ------------
Total liabilities 310,448,989 336,476,207
------------ ------------
Commitments and contingencies -- --
Stockholders' equity:
Preferred Stock, $.10 par value, authorized
1,000,000 shares, no shares issued -- --
Common Stock, $.10 par value
Authorized 10,000,000 shares
Issued and outstanding 8,184,401 in 1996 and
8,172,401 in 1995 818,440 817,240
Additional paid-in capital 35,529,179 35,321,339
Net unrealized gains (losses) on securities available for sale (net of
income taxes of $1,644,908 in 1996
and $3,231,293 in 1995) 3,193,055 6,272,511
Foreign currency translation adjustment 108,450 110,185
Retained earnings 64,563,972 56,554,932
------------ ------------
Total stockholders' equity 104,213,096 99,076,207
------------ ------------
Total liabilities and stockholders' equity $414,662,085 $435,552,414
============ ============
</TABLE>
See accompanying notes to interim consolidated financial statements.
<PAGE> 4
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Three Months Ended
June 30
1996 1995
(Unaudited)
Revenues:
<S> <C> <C>
Net premiums earned $ 18,214,764 $ 20,933,858
Commission income 2,322,093 2,879,776
Net investment income 3,554,411 3,441,732
Net realized capital gains 170,960 376,517
Other income 124,000 272,641
------------ ------------
Total revenues 24,386,228 27,904,524
------------ ------------
Operating expenses:
Losses and loss adjustment
expenses incurred 11,737,763 14,484,860
Commissions 2,702,857 3,405,961
Other operating expenses 4,466,367 5,618,018
Interest expense 358,296 533,662
------------ ------------
Total operating expenses 19,265,283 24,042,501
------------ ------------
Operating income before income taxes 5,120,945 3,862,023
Income tax expense:
Current 1,035,121 895,746
Deferred 288,728 (39,347)
------------ ------------
Total income tax expense 1,323,849 856,399
Net income $ 3,797,096 $ 3,005,624
============ ============
Per share data:
Average common and common equivalent
shares outstanding 8,299,301 8,176,309
Net income $ 0.46 $ 0.37
============ ============
</TABLE>
See accompanying notes to interim consolidated financial statements.
-2-
<PAGE> 5
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Six Months Ended
June 30
1996 1995
(Unaudited)
<S> <C> <C>
Revenues:
Net premiums earned $ 37,403,593 $ 38,651,948
Commission income 4,388,919 5,473,946
Net investment income 7,117,708 6,854,102
Net realized capital gains 345,798 314,370
Other income 327,234 489,764
------------ ------------
Total revenues 49,583,252 51,784,130
------------ ------------
Operating expenses:
Losses and loss adjustment
expenses incurred 23,573,513 27,597,166
Commissions 5,314,390 5,866,116
Other operating expenses 9,006,278 11,132,653
Interest expense 1,132,530 1,073,585
------------ ------------
Total operating expenses 39,026,711 45,669,520
------------ ------------
Operating income before income taxes 10,556,541 6,114,610
Income tax expense:
Current 2,589,326 1,204,075
Deferred (41,828) (120,817)
------------ ------------
Total income tax expense 2,547,498 1,083,258
Net income $ 8,009,043 $ 5,031,352
============ ============
Per share data:
Average common and common equivalent
shares outstanding 8,297,959 8,191,127
Net income $ 0.97 $ 0.61
============ ============
</TABLE>
See accompanying notes to interim consolidated financial statements.
-3-
<PAGE> 6
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended
June 30
1996 1995
(Unaudited)
<S> <C> <C>
Operating activities:
Net income $ 8,009,043 $ 5,031,352
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation & amortization 292,899 345,763
Reinsurance receivable on paid
and unpaid losses and loss
adjustment expenses 21,062,265 21,517,749
Reserve for losses and loss
adjustment expenses (22,622,802) (13,839,754)
Prepaid reinsurance premiums 1,268,504 6,592,105
Unearned premiums 1,891,009 (9,283,849)
Premiums in course of collection (11,765,873) 7,821,203
Commissions receivable 614,259 (673,415)
Deferred policy acquisition costs (421,475) 163,523
Accrued investment income 128,240 (132,965)
Reinsurance balances payable 446,075 (4,940,780)
Federal income taxes payable (750,798) 581,391
Deferred federal income taxes 232,582 38,560
Net realized losses (gains) on investments (345,798) (314,370)
Other (792,819) (1,837,061)
------------ ------------
Net cash provided by (used in) operating
activities $ (2,754,689) $ 11,069,452
------------ ------------
Investing activities:
Fixed maturities available for sale at fair value:
Redemptions and maturities $ 7,348,039 $ 4,653,409
Sales 23,097,227 40,416,123
Purchases (31,740,791) (57,195,991)
Equity securities:
Sales 1,627,903 978,664
Purchases (1,989,686) (1,415,835)
Payable for securities purchased (749,682) 52,526
Net sale (purchases) of short-term investments 930,699 8,482,697
Purchase of property and equipment (135,274) (126,697)
------------ ------------
Net cash used in investing activities $ (1,611,565) $ (4,155,104)
------------ ------------
Financing activities:
Proceeds from bank loans $ -- $ 1,000,000
Repayment of bank loans (2,500,000) (5,500,000)
Notes payable to shareholders -- (1,666,038)
Proceeds from exercise of stock options 209,040 --
------------ ------------
Net cash used in financing activities (2,290,960) (6,166,038)
------------ ------------
Increase (decrease) in cash (6,657,214) 748,310
Cash at beginning of period $ 7,332,698 730,047
------------ ------------
Cash at end of period $ 675,484 $ 1,478,357
============ ============
</TABLE>
See accompanying notes to interim consolidated financial statements.
-4-
<PAGE> 7
THE NAVIGATORS GROUP, INC. AND SUBSIDIARIES
Notes to Interim Consolidated Financial Statements
(1) Accounting Policies
The interim financial statements are unaudited but reflect all
adjustments which, in the opinion of management, are necessary to provide a
fair statement of the results of The Navigators Group, Inc. and its
subsidiaries (the "Company") for the interim periods presented. 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 financial statements should be read in conjunction with the
financial statements and notes thereto contained in the Company's Form 10-K
for the year ended December 31, 1995.
(2) Reinsurance Ceded
The Company's ceded earned premiums were $15,335,792 and $18,803,311
for the three months ended June 30, 1996 and 1995, respectively, and were
$27,318,592 and $39,843,239 for the six months ended June 30, 1996 and
1995, respectively. The Company's ceded losses were $10,574,028 and
$17,350,153 for the three months ended June 30, 1996 and 1995,
respectively, and were $18,071,939 and $36,704,896 for the six months ended
June 30, 1996 and 1995, respectively.
-5-
<PAGE> 8
THE NAVIGATORS GROUP, INC.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
General
The Company is a holding company with 12 wholly owned subsidiaries.
Two of the Company's subsidiaries, Navigators Insurance Company and NIC
Insurance Company ("NIC"), specialize principally in underwriting marine,
aviation and property (including inland marine) insurance, and certain lines of
specialty reinsurance and non-marine insurance. Navigators Insurance Company has
been active since 1983. NIC is a wholly owned subsidiary of Navigators Insurance
Company, was licensed in 1989 and began operations during 1990. Navigators
Insurance Company and NIC are collectively referred to herein as "Navigators."
Eight of the Company's subsidiaries, Somerset Marine, Inc., Somerset of
Georgia, Inc., Somerset Insurance Services of Texas, Inc., Somerset Insurance
Services of California, Inc., Somerset Insurance Services of Washington, Inc.,
Somerset Property, Inc., Somerset Re Management, Inc. and Navigators Management
Corporation (collectively, the "Somerset Companies"), are a group of
underwriting management companies which produce, manage and underwrite insurance
and reinsurance for Navigators and nine other unrelated insurance companies. The
other subsidiaries of the Company are Somerset Casualty Agency, Inc. and
Somerset Marine Aviation Property Managers Inc., which are both inactive.
The Company's revenue is primarily comprised of premiums, commissions and
investment income. Navigators derives substantially all of its business from
insurance underwritten by the Somerset Companies. The insurance business and
operations of Navigators are managed by one of the Somerset Companies,
Navigators Management Corporation.
The Somerset Companies specialize principally in four lines of business:
marine, aviation and property (including inland marine) insurance, and certain
lines of specialty reinsurance and non-marine insurance. They underwrite marine
business through a syndicate of insurance companies, Navigators having the
largest participation in the syndicate. The remaining lines of business are
underwritten exclusively for the account of Navigators. The Somerset Companies
derive their revenue from commissions, investment income and service fees from
Navigators and other insurers. Commissions are earned both on a fixed percentage
of premiums and on underwriting profits on business placed with the
participating insurance companies within the marine syndicate. Property and
casualty insurance premiums are cyclical in nature and, accordingly, during a
"hard market" demand for property and casualty insurance exceeds supply, or
capacity, and as a result,
-6-
<PAGE> 9
premiums and commissions increase. On the downturn of the property and casualty
cycle, supply exceeds demand, and as a result, premiums and commissions
decrease.
Navigators and the Somerset Companies earn investment income on cash
balances and invested assets. The Somerset Companies also earn investment income
on fiduciary funds. Such fiduciary funds are invested, subject to applicable
insurance regulations, primarily in short-term instruments.
Results of Operations
General. The results of operations of the Company during the second quarter
of 1996 reflect management's emphasis on the Company's core ocean marine
business, its inland marine business and its non-marine program book of
business.
Revenues. Gross written premium for the first six months of 1996 decreased
by 4% to $66,612,000 from $69,212,000 for the first six months of 1995.
The following table sets forth Navigators' gross written premium by line of
business and net written premium in the aggregate:
<TABLE>
<CAPTION>
Six Months Ended June 30,
-----------------------------------------------------------
1996 1995
---- ----
(Dollars in thousands)
<S> <C> <C> <C> <C>
Marine $ 27,420 41% $ 28,568 41%
Aviation 18,257 27% 24,227 35%
Property and Inland
Marine 7,220 11% 5,566 8%
Reinsurance and Non-Marine
Program Insurance 13,715 21% 10,851 16%
-------- --- -------- ---
Total Gross Premium
Written $ 66,612 100% $ 69,212 100%
======== === ======== ===
Ceded Premium Written (26,049) (33,336)
-------- --------
Total Net Premium
Written 40,563 35,876
======== ========
</TABLE>
Marine Premium. Marine gross premium decreased 4% when comparing the first
six months of 1996 to the first six months of 1995. Although the marine market
is competitive at this time, management anticipates that the total amount of
marine business written in 1996 will be comparable to the amount written in
1995.
Aviation Premium. Aviation gross premium decreased 25% from the first six
months of 1995 to the first six months of 1996.
-7-
<PAGE> 10
This decrease reflects management's decision to reduce Navigators' gross
aviation business.
Property Premium. Property and Inland Marine gross premium increased 30%
from the first six months of 1995 to the first six months of 1996 reflecting the
continuing development of the Company's inland marine book of business. The
Company decided in late 1994 to cease writing large commercial and industrial
property risks, which is essentially a property catastrophe book of business,
and to concentrate on the inland marine risks.
Specialty Reinsurance and Non-Marine Insurance Premium. Gross specialty
reinsurance and non-marine insurance premium increased 26% from the first six
months of 1995 to the first six months of 1996. The increase was due primarily
to the emergence of new non-marine program business, which management began
developing in the last half of 1995 to augment its reinsurance book.
Ceded Premium. The decrease in ceded premium results from a decrease in
gross aviation writings which are heavily reinsured and more favorable
reinsurance rates on this business.
Total Premium. Net earned premium for the first six months of 1996 was
$37,404,000 as compared to $38,652,000 for the first six months of 1995. Net
earned premium generally follows the pattern of written premium; however, the
run-off of the property book in 1995 resulted in net earned premiums which
exceeded net written premiums.
Commission income, based on gross premiums earned and net underwriting
profits during the first six months of 1996 was approximately $4,389,000
compared to approximately $5,474,000 during the corresponding period in 1995,
and $2,322,000 for the three months ended June 30, 1996 as compared to
$2,880,000 for the corresponding period in 1995. The decrease is primarily a
result of Navigators' decision to increase its participation in the aviation
business managed by the Somerset Companies to 100%, which eliminated commission
income paid by the former participants in the aviation insurance pool.
Investment income increased 4% to approximately $7,118,000 during the first
six months of 1996 from approximately $6,854,000 during the corresponding period
in 1995, and increased 3% for the three months ended June 30, 1996 over the
corresponding period in 1995. This increase is due primarily to increased
interest rates.
Included in pre-tax net income were $346,000 in realized capital gains for
the first six months of 1996 and $314,000 in realized capital gains for the same
period last year. On an after tax basis these represent realized gains of $0.03
per share for the respective periods. Included in pre-tax net income for the
three months ended June 30, 1996 was $171,000 of realized capital gains.
-8-
<PAGE> 11
Realized capital gains for the corresponding period in 1995 totalled $377,000.
The Company holds an equity interest in Navigators Corporate Underwriters
plc, which through its wholly-owned subsidiary, Navigators Underwriters Limited,
has been admitted to underwrite at Lloyd's of London as a corporate name with
limited liability. The Company will report its share of the earnings of
Navigators Corporate Underwriters plc during the last half of 1996 when such
information is expected to be available.
Expenses. The ratio of loss and loss adjustment expenses incurred to net
premiums earned was 63.0% and 71.4% during the first six months of 1996 and
1995, respectively, and 64.4% and 69.2% for the three months ended June 30, 1996
and 1995. The loss ratio for the first six months of 1995 includes additional
net loss development of $6,221,000 from the Northridge, California earthquake,
which occurred on January 17, 1994 (the "Northridge Earthquake"). The decrease
is due primarily to a return to more normal experience in comparison to the
adverse development on losses from the Northridge Earthquake in 1995.
Commission expense as a percentage of net premiums earned were 14.2% and
15.2% during the first six months of 1996 and 1995, respectively, and 14.8% and
16.3% for the three months ended June 30, 1996 and 1995.
Other operating expenses decreased 19.1% to approximately
$9,006,000 during the first six months of 1996 from approximately $11,133,000
during the corresponding period in 1995, and decreased 20.7% to approximately
$2,703,000 for the three months ended June 30, 1996 from approximately
$3,406,000 for the same period in 1995. This decrease is primarily due to the
severance charges incurred in the first quarter of 1995 and savings on
operational expenses resulting from the Company's restructuring and headcount
reduction that began in early 1995.
Interest expense increased 5.5% to approximately $1,132,000 during the
first six months of 1996 from approximately $1,074,000 during the corresponding
period of 1995. This increase is primarily due to the interest expense on the
Company's rollback liability under Proposition 103 settled with the State of
California Insurance Department on March 19, 1996.
The effective tax rate was a 24.1% expense and a 17.7% expense for the six
months ended June 30, 1996 and 1995, respectively. This increase results from a
greater portion of total income being attributable to underwriting income and,
therefore, a lesser portion being attributable to tax exempt income.
For the first six months of 1996, the Company had after tax income of
$8,009,000 compared to after tax income of $5,031,000 for the same period last
year, and for the three months ended June
-9-
<PAGE> 12
30, 1996, the Company had after tax income of $3,797,000 compared to after tax
income of $3,006,000 for the same period in 1995, primarily due to a return to
normal experience in comparison to the losses from the Northridge Earthquake. On
a per share basis, this represents net income of $0.97 and $0.61 for the first
six months of 1996 and 1995, respectively, and $0.46 and $0.37 for the three
months ended June 30, 1996 and 1995, respectively.
Liquidity and Capital Resources
Cash flow from operations was $(2,755,000) and $11,069,000 for the first
six months of 1996 and 1995, respectively. Cash decreased from $7,333,000 at
December 31, 1995 to $675,000 at June 30, 1996 as a result of cash used in
operations, $1,610,000 in cash used in investing and $2,500,000 in cash used
for the repayment of bank loans. Cash used in operations during 1996 included
payments on previously established reserves for the Northridge Earthquake. The
Company believes that the cash flow generated by the operating activities of
the Company's subsidiaries, including the Somerset Companies, will provide
sufficient funds for the Company to meet its liquidity needs.
Investment assets decreased 2% during the first six months of 1996 to
$224,235,000 at June 30, 1996. Investment income during the six months was
$3,554,000, an increase of 4%, reflecting increased interest rates.
The Company has entered into a credit agreement dated as of August 5,
1994. The Company expects to amend during the third quarter of 1996 the credit
agreement to extend the period within which to make principal payments under
the term loan of such credit agreement and to make certain other changes to
such credit agreement. Pursuant to the existing credit agreement, the Company
may borrow, subject to certain conditions, up to an aggregate of $5,000,000 in
revolving credit loans. As of June 30, 1996, the Company had outstanding
$15,000,000 in term loans and $2,000,000 in revolving credit loans under the
credit agreement.
As of June 30, 1996, the Company's consolidated stockholders' equity was
$104,213,000, an increase from $99,076,000 as of December 31, 1995.
-10-
<PAGE> 13
THE NAVIGATORS GROUP, INC. & SUBSIDIARIES
Part II - Other Information
Item 1. Legal Proceedings:
Neither the Company nor any of its subsidiaries is a party to, nor is
the property thereof the subject of, any pending legal proceedings which
depart from the ordinary routine litigation incident to the kinds of
business conducted by the Company and its subsidiaries or, if such
proceedings constitute other than routine litigation, in which there is a
reasonable possibility of an adverse decision which could have any material
adverse effect upon the financial condition of the Company.
In November 1988, the voters of the State of California approved
Proposition 103, which required most property and casualty insurance
companies, among other things, to reduce rates charged to California
insureds to a level 20% below November 8, 1987 levels. On March 19, 1996,
the Company agreed with the Insurance Commissioner of the State of
California to settle its rollback liability under Proposition 103, a
settlement which has been fully reflected in the Company's financial
statements. The settlement is not affected by the preliminary injunction
issued in Proposition 103 Enforcement Project v. Quakenbush, LASC Case No.
BS037146.
Item 2. Changes in Securities:
None.
Item 3. Defaults Upon Senior Securities:
None.
Item 4. Submissions of Matters to a Vote of Securities Holders:
On May 30, 1996, the stockholders voted for the following
matters at the annual stockholder meeting.
(a) The election of seven (7) directors to serve until the 1997
Annual Meeting of Stockholders or until their respective
successors have been duly elected and qualified. The results of
the voting were as follows (there were no broker non-votes):
<TABLE>
<CAPTION>
Name For Withheld
---- --- --------
<S> <C> <C>
Terence N. Deeks 6,148,198 100
Robert M. DeMichele 6,148,198 100
Leandro S. Galban, Jr. 6,148,198 100
John F. Knight 6,148,198 100
</TABLE>
-11-
<PAGE> 14
<TABLE>
<S> <C> <C>
Marc M. Tract 6,148,198 100
William D. Warren 6,148,098 200
Robert F. Wright 6,148,198 100
</TABLE>
(b) The ratification of the appointment of KPMG Peat Marwick LLP as
the independent auditors of the Company. The stockholders cast
6,131,259 votes for and 1,250 votes against ratification. There
were 15,789 abstentions and no broker non-votes.
Item 5. Other Information:
None.
Item 6. Exhibits and Reports on Form 8-K:
(a) Exhibits:
Exhibit No. Description of Exhibit
27.1 Financial Data Schedule
(b) Reports on Form 8-K: There were no reports on Form 8-K filed for
the six months ended June 30, 1996.
-12-
<PAGE> 15
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.
The Navigators Group, Inc.
(Registrant)
August 14, 1996 /s/ W. Allen Barnett
-----------------------------------
(Date) W. Allen Barnett, Senior Vice
President, Chief Financial Officer
<PAGE> 16
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description of Exhibit Page
- ----------- ---------------------- ----
27.1 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1
<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> 206,784,157
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 8,832,575
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 224,235,019
<CASH> 675,484
<RECOVER-REINSURE> 8,773,033
<DEFERRED-ACQUISITION> 2,944,655
<TOTAL-ASSETS> 414,662,085
<POLICY-LOSSES> 251,231,252
<UNEARNED-PREMIUMS> 28,644,929
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 17,942,034
0
0
<COMMON> 818,440
<OTHER-SE> 103,394,656
<TOTAL-LIABILITY-AND-EQUITY> 414,662,085
37,403,593
<INVESTMENT-INCOME> 7,117,708
<INVESTMENT-GAINS> 345,798
<OTHER-INCOME> 4,716,153
<BENEFITS> 23,573,513
<UNDERWRITING-AMORTIZATION> 5,314,390
<UNDERWRITING-OTHER> 9,006,278
<INCOME-PRETAX> 10,556,541
<INCOME-TAX> 2,547,498
<INCOME-CONTINUING> 8,009,043
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,009,043
<EPS-PRIMARY> 0.97
<EPS-DILUTED> 0.97
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
