<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, 1995
---------------------------------------------
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 1-9518
------------------------------------------------------
THE PROGRESSIVE CORPORATION
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Ohio 34-0963169
- -----------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6300 Wilson Mills Road, Mayfield Village, Ohio 44143
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(216) 461-5000
- -----------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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.
Common Shares $1 par value: 71,907,929 outstanding at July 31, 1995
1
<PAGE> 2
PART I - FINANCIAL INFORMATION
------------------------------
ITEM 1. Financial Statements.
The Progressive Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
----------------------------------- ----------------------------------
Periods Ended June 30, 1995 1994 % Change 1995 1994 % Change
<S> <C> <C> <C> <C> <C> <C>
(millions - except per share amounts)
NET PREMIUMS WRITTEN $754.4 $622.6 21 $1,441.3 $1,180.8 22
======================== =====================
REVENUES
Premiums earned $677.4 $536.6 26 $1,301.7 $1,015.3 28
Investment income 50.0 38.0 32 94.8 74.8 27
Net realized gains on security sales 22.1 8.9 148 37.5 6.3 495
Service revenues 10.0 10.5 (5) 19.3 20.0 (4)
------------------------ ---------------------
Total revenues 759.5 594.0 28 1,453.3 1,116.4 30
------------------------ ---------------------
EXPENSES
Losses and loss adjustment expenses 494.6 354.4 40 931.5 663.4 40
Policy acquisition costs 114.0 97.6 17 220.6 184.7 19
Other underwriting expenses 40.9 34.7 18 84.9 73.6 15
Investment expenses 2.5 2.3 9 4.6 4.4 5
Service expenses 8.8 9.5 (7) 17.2 17.6 (2)
Interest expense 14.2 13.8 3 28.5 27.3 4
------------------------ ---------------------
Total expenses 675.0 512.3 32 1,287.3 971.0 33
------------------------ ---------------------
NET INCOME
Income before Federal income taxes 84.5 81.7 3 166.0 145.4 14
Provision for Federal income taxes 23.7 21.2 12 44.5 36.8 21
------------------------ ---------------------
Net income $ 60.8 $ 60.5 -- $ 121.5 $ 108.6 12
======================== =====================
PER SHARE
Primary $ .79 $ .79 -- $ 1.59 $ 1.40 14
Fully diluted .79 .79 -- 1.59 1.40 14
WEIGHTED NUMBER AVERAGE EQUIVALENT SHARES
Primary 74.0 73.8 -- 74.0 74.2 --
Fully diluted 74.0 73.9 -- 74.0 74.2 --
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
The Progressive Corporation and Subsidiaries
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
-------------------- ----------------------
1995 1994 1994
--------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
(millions)
ASSETS
Investments:
Held-to-maturity:
Fixed maturities, at amortized cost
(market: $318.8, $355.9 and $343.8) $309.7 $ 345.9 $ 337.6
Available-for-sale:
Fixed maturities, at market (amortized cost:
$2,347.9, $1,955.5 and $2,129.7) 2,349.8 1,944.3 2,087.0
Equity securities, at market (cost: $528.3, $504.7 and $481.0) 544.9 510.5 476.3
Short-term investments, at amortized cost (market $280.7,
$310.5 and $279.2) 280.7 310.3 279.1
-------------------- ----------------------
Total investments 3,485.1 3,111.0 3,180.0
Cash 13.2 11.7 13.4
Accrued investment income 39.1 39.0 43.4
Premiums receivable, net of allowance for doubtful accounts of
$16.4, $14.6 and $15.6 622.8 476.7 542.4
Reinsurance recoverables 374.3 393.7 379.7
Prepaid reinsurance premiums 81.6 95.7 83.2
Deferred acquisition costs 183.7 152.6 161.6
Federal income taxes 88.8 94.4 103.2
Property and equipment, net of accumulated depreciation of
$119.3, $110.4 and $116.7 152.7 125.6 143.3
Other assets 37.9 28.1 24.9
-------------------- ----------------------
Total assets $5,079.2 $4,528.5 $4,675.1
==================== ======================
LIABILITIES AND SHAREHOLDERS' EQUITY
Unearned premiums $1,174.7 $ 948.6 $1,036.7
Loss and loss adjustment expense reserves 1,546.2 1,433.5 1,434.4
Policy cancellation reserve 40.5 57.4 47.3
Accounts payable and accrued expenses 324.0 382.6 329.2
Funded debt 675.7 675.5 675.6
-------------------- ----------------------
Total liabilities 3,761.1 3,497.6 3,523.2
-------------------- ----------------------
Shareholders' equity:
9 3/8% Serial Preferred Shares, Series A (issued and outstanding:
3.5, 3.6 and 3.5) 85.8 87.0 85.8
Common Shares, $1.00 par value
(treasury shares of 11.2, 11.0 and 11.2) 71.9 71.3 71.2
Paid-in capital 370.4 355.3 357.1
Net unrealized appreciation (depreciation) on investment securities 12.0 (3.5) (30.7)
Retained earnings 778.0 520.8 668.5
-------------------- ----------------------
Total shareholders' equity 1,318.1 1,030.9 1,151.9
-------------------- ----------------------
Total liabilities and shareholders' equity $5,079.2 $4,528.5 $4,675.1
==================== ======================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
The Progressive Corporation and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30, 1995 1994
--------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
(millions)
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $121.5 $108.6
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 10.0 8.3
Net realized gains on security sales (37.5) (6.3)
Changes in:
Unearned premiums 138.0 176.6
Loss and loss adjustment expense reserves 111.8 84.9
Accounts payable and accrued expenses .6 30.6
Policy cancellation reserve (6.8) (2.7)
Prepaid reinsurance 1.6 (11.1)
Reinsurance recoverables 5.4 (12.8)
Premiums receivable (80.4) (96.1)
Deferred acquisition costs (22.1) (28.0)
Federal income taxes (8.8) 3.9
Other, net 12.6 6.5
----------------------------------------
Net cash provided by operating activities 245.9 262.4
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases:
Held-to-maturity: fixed maturities (.2) (55.8)
Available-for-sale: fixed maturities (1,530.4) (747.1)
equity securities (526.3) (145.5)
Sales:
Available-for-sale: fixed maturities 1,080.7 378.4
equity securities 488.3 78.3
Maturities, paydowns, calls and other:
Held-to-maturity: fixed maturities 26.7 18.1
Available-for-sale: fixed maturities 254.1 166.1
Net purchases of short-term investments (1.6) (79.5)
Receivable on securities (18.1) (3.6)
Purchases of property and equipment (21.0) (27.5)
----------------------------------------
Net cash used in investing activities (247.8) (418.1)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from exercise of stock options 7.2 1.5
Tax benefits from exercise of stock options 6.8 --
Proceeds from funded debt -- 198.4
Payments on funded debt (.2) (.3)
Dividends paid to shareholders (12.1) (11.4)
Acquisition of treasury shares -- (29.5)
----------------------------------------
Net cash provided by financing activities 1.7 158.7
----------------------------------------
Increase (decrease) in cash (.2) 3.0
Cash, January 1 13.4 8.7
----------------------------------------
Cash, June 30 $13.2 $11.7
========================================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
The Progressive Corporation and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1 Supplemental Cash Flow Information. The Company paid Federal income
taxes of $40.5 million and $29.0 million for the six months ended June 30, 1995
and 1994, respectively. Total interest paid was $28.3 million for each of the
six months ended June 30, 1995 and 1994.
NOTE 2 On June 30, 1995, the Company paid a quarterly dividend of $.055 per
Common Share and a regular quarterly dividend of approximately $.59 per share
on the 9 3/8% Serial Preferred Shares, Series A, to shareholders of record as
of the close of business on June 9, 1995. Both dividends were declared by the
Board of Directors on April 28, 1995.
On July 28, 1995, the Board of Directors declared a quarterly dividend of $.055
per Common Share and a regular quarterly dividend of approximately $.59 per
share on the 9 3/8% Serial Preferred Shares, Series A. Both are payable
September 30, 1995, to shareholders of record as of the close of business on
September 8, 1995.
NOTE 3 The financial statements reflect all normal recurring adjustments which
were, in the opinion of management, necessary to present a fair statement of
the results for the interim periods. The results of operations for the periods
ended June 30, 1995 are not necessarily indicative of the results expected for
the full year.
5
<PAGE> 6
ITEM 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
RESULTS OF OPERATIONS
For the second quarter 1995, operating income, which excludes net realized
gains on security sales, was $46.4 million, or $.60 per share, compared to
$54.7 million, or $.71 per share, last year. The combined ratio was 95.9,
compared to 90.7 for the second quarter 1994. For the six months ended June
30, 1995, operating income was $97.1 million, or $1.26 per share, compared to
$104.5 million, or $1.35 per share, in 1994. The year-to-date combined ratio
was 95.0, compared to 90.8 last year.
Net premiums written increased 21% over the second quarter 1994 and 22%
year-to-date, primarily reflecting unit growth in the core automobile insurance
business. This growth resulted from the Company's rates becoming more
competitive due to cost control efforts. Premiums earned, which are a function
of the amount of premiums written in the current and prior periods, increased
26% for the quarter and 28% for the first six months. Service revenue decreased
5% to $10.0 million for the quarter and 4% to $19.3 million for the first six
months.
Claim costs, which represent actual and estimated future payments to or for our
policyholders, as well as loss estimates for future assignments and assessments
under state-mandated assigned risk programs, and costs to settle these claims,
increased as a percentage of premiums earned to 73% for the quarter, compared
to 66% in 1994. Results include $7.9 million of losses from storms that hit
Texas on April 28-30 and May 5-6 and Louisiana on May 7-10. During the
quarter, the Company raised rates, but at a pace slower than its rising loss
costs. Year-to-date claim costs were 72%, compared to 65% last year.
Policy acquisition costs and other underwriting expenses were 23% of premiums
earned for the second quarter, compared to 25% in 1994, and 23% for the first
six months, compared to 25% last year, reflecting a continued commitment to
reduce expenses. During the second quarter 1995, the Company ceased its policy
of capitalizing direct-response advertising costs and, as a result, charged
$3.1 million of previously deferred expenses to earnings. Service expenses
decreased 7% for the quarter and 2% for the first six months.
Recurring investment income (interest and dividends) increased 32% for the
quarter and 27% for the first six months, reflecting an increase in the average
investment portfolio and a mix shift to taxable securities. The Company had
net realized gains on security sales of $22.1 million and $37.5 million for the
quarter and first six months, respectively, compared to $8.9 million and $6.3
million in 1994. On June 30, 1995, the Company's portfolio had $27.6 million
in total unrealized gains, compared to $41.1 million in total unrealized losses
at December 31, 1994, primarily reflecting the general decline in interest rate
levels.
The Company continues to invest in fixed maturity, short-term and equity
securities. The majority of the portfolio ($2,764.2 million, or 79.4%, at June
30, 1995 and $2,311.0 million, or 74.3%, at June 30, 1994) was in short-term
and intermediate-term, investment-grade fixed-income securities. Long-term
investment-grade fixed-income securities represented $101.4 million, or 2.9%,
and $138.6, or 4.4%, of the total investment portfolio at June 30, 1995 and
1994, respectively.
6
<PAGE> 7
As of June 30, 1995 and 1994, the equity portfolio of the Company was $544.9
million, or 15.6%, and $510.5 million, or 16.4%, respectively, of the total
investment portfolio. The equity portfolio consists of preferred stocks
($314.8 million in 1995 and $404.4 million in 1994) and common stocks ($230.1
million in 1995 and $106.1 million in 1994). As of June 30, 1995 and 1994, the
non-investment-grade fixed-income portfolio of the Company was $74.6 million,
or 2.1%, and $150.9 million, or 4.9%, respectively, of the total investment
portfolio.
The Company's financial instruments with off-balance-sheet risk had a net
market value of $(.2) million and $3.8 million as of June 30, 1995 and 1994,
respectively.
The weighted average annualized fully taxable equivalent book yield of the
portfolio was 6.9% and 6.5% for the six months ended June 30, 1995 and 1994,
respectively.
FINANCIAL CONDITION
Progressive's insurance operations create liquidity by collecting and investing
premiums written from new and renewal business in advance of paying claims.
For the six months ended June 30, 1995, operations generated a positive cash
flow of $245.9 million.
RECENT DEVELOPMENTS
In October 1990, the Company purchased Anvil Insurance Company, since renamed
Pro-West Insurance Company. When Pro-West was acquired, the seller agreed, as
part of the purchase agreement, to assume full responsibility for any
forthcoming obligations under California Proposition 103 since it was not
possible at the time of acquisition to determine Pro-West's Proposition 103
obligations, if any.
In June 1995, the seller received notification from the California Department
of Insurance that Pro-West's current rollback obligation is $4.0 million,
including interest. This amount represents 20% of Pro-West's direct premiums
written for all policies in Proposition 103 lines with inception or renewal
dates between November 8, 1988 and November 7, 1989. Based on available
legislative relief and other defenses, the Company estimates that the rollback
obligation may be considerably less. The Company believes, based on the
provisions of the purchase agreement and the legal remedies available to it,
that it will obtain indemnification from the seller. As a result, this
rollback obligation does not impact the Company's results of operations.
However, no assurances can be made that Pro-West will be able to obtain full
indemnification from the seller. Pro-West would remain responsible for any
uncollectible amounts.
7
<PAGE> 8
PART II - OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
See exhibit index on page 10.
(b) Reports on Form 8-K during the quarter ended
June 30, 1995: None
8
<PAGE> 9
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 PROGRESSIVE CORPORATION
---------------------------
(Registrant)
Date: August 11, 1995 BY: /s/ DAVID M. SCHNEIDER
--------------- ------------------------
David M. Schneider
Secretary
Date: August 11, 1995 BY: /s/ CHARLES B. CHOKEL
--------------- -----------------------
Charles B. Chokel
Chief Financial Officer
9
<PAGE> 10
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit No. Form 10-Q
Under Reg. Exhibit
S-K. Item 601 No. Description of Exhibit
------------- ----------- ----------------------
<S> <C> <C>
(10) 10 Separation Agreement and General Release,
dated April 28, 1995, between the
Registrant and Michael Murr, formerly
Chief Investment Officer
(11) 11 Computation of Earnings Per Share
(27) 27 Financial Data Schedule
</TABLE>
10
<PAGE> 1
EXHIBIT NO. 10
--------------
SEPARATION AGREEMENT AND GENERAL
RELEASE, DATED APRIL 28, 1995,
BETWEEN THE REGISTRANT AND MICHAEL MURR,
FORMERLY CHIEF INVESTMENT OFFICER
<PAGE> 2
SEPARATION AGREEMENT AND GENERAL RELEASE
----------------------------------------
1. I, MICHAEL MURR ("Employee"), accept the severance of my employment
from Progressive Partners, Inc. ("Progressive") effective April 28,
1995 (the "Separation Date"), in accordance with the terms of this
Agreement. In accepting the consideration noted in Paragraph 2 below,
Employee releases Progressive and its affiliated companies, their
officers, directors, employees and agents, from all actions, suits,
claims, and demands in law or equity, that Employee ever had or now
has, by reason of any matter, cause, or thing, and particularly any
claims relating in any way to Employee's employment relationship or
the termination of Employee's employment relationship with
Progressive, including, without limitation, any claim under the Age
Discrimination in Employment Act, any claim arising under any federal,
state, or local law and any common law claim, but excepting those
matters described in Paragraph 2 below.
2. In full consideration of Employee signing this Agreement and for the
covenants contained herein, Progressive hereby agrees to the
following:
A. Employee shall be paid One Million One Hundred Fifty Thousand
Dollars ($1,150,000) (the "Severance Amount"), less all
applicable withholding taxes, in one (1) lump-sum payment.
The Severance Amount shall be paid to Employee within ten (10)
days of the execution of this Agreement.
B. Employee shall be paid for credited but unused vacation time
determined as of the Separation Date with such payment to be
made within ten (10) days of the Separation Date.
3. Other than the rights specified in 2 above, Employee waives any and
all rights he now has or might hereafter have acquired to, and
acknowledges the forfeiture of, any and all rights under The
Progressive Corporation 1994 and 1995 Executive Bonus Plans, The
Progressive Partners Stock Option Plan, The Progressive Corporation
1989 Incentive Plan, The Progressive Corporation Separation Allowance
Plan, The Progressive Corporation Executive Deferred Compensation
Plan, and to any other compensation or bonus Employee may have
received had Employee remained employed by Progressive.
4. Employee shall make best efforts to remove all personal items from his
office at the earliest practical time, provided that such removal
shall occur during normal weekday business hours.
5. Each party's obligations shall terminate in the event the other party
breaches any of his or its obligations or representations under this
Agreement.
<PAGE> 3
6. Employee hereby agrees that neither Employee nor any person,
organization, or other entity acting on Employee's behalf will
communicate or permit to be communicated, either directly or
indirectly, any information regarding the financial terms of this
Agreement except to Employee's counsel, Employee's spouse, Employee's
accountant, a prospective employer, financial institutions when needed
to demonstrate Employee's personal financial condition, or to any
court involved in any action brought by either party to enforce the
terms of this Agreement or as otherwise required by law. Progressive
shall not disclose the terms of this Agreement except as is necessary
to fulfill its obligations hereunder or as is required by law.
7. The parties agree and acknowledge that this Agreement is not and shall
not be construed to be an admission of any violation of any federal,
state, or local law, regulation or of any duty owed by either party to
the other and that the execution of this Agreement is a voluntary act
to provide conclusion to Employee's employment relationship with
Progressive.
8. Progressive represents and warrants that it is not presently aware of
any facts which would give rise to a claim against Employee.
9. Employee agrees that Employee will maintain the confidentiality of
confidential information which Employee has received by virtue of
Employee's employment with Progressive and will refrain from using
such information or disclosing it to anyone other than Progressive or
its employees or Employee's counsel. For purposes of this Agreement,
confidential information is information which Progressive endeavors to
keep confidential, including, without limitation, Progressive's
investment strategies and objectives, rate schedules, underwriting
information, the terms of contracts and policies, marketing plans,
program designs, trade secrets, proprietary information, and any such
information provided by a third party to Progressive in confidence.
Progressive shall make best efforts to ensure that no person acting
for or on its behalf shall directly or indirectly disclose to any
person any fact, allegation, or contention regarding Employee's
employment, performance, termination of employment or the reasons
therefore, or any other information acquired by Progressive in
connection with Employee's employment, or release any publicity or
make any public statement with respect thereto except in the form of a
mutually agreed upon press release or as may be required by law.
10. Employee has read and understands all of the terms of this Agreement.
Employee signs this Agreement in exchange for the consideration to be
given to Employee. Neither Progressive nor its agents,
representatives, or employees have made any representations to
Employee concerning the terms or effects of this Agreement other than
those contained in the Agreement.
11. The terms of this Separation Agreement and General Release are
separate and independent and should any of them be declared invalid or
unenforceable by any court, the remaining provisions and terms of this
Agreement shall remain in full force and effect.
<PAGE> 4
12. This Agreement shall be governed and interpreted in accordance with
the laws of the State of New York.
EMPLOYEE HAS READ AND UNDERSTANDS ALL OF THE TERMS OF THIS AGREEMENT
AND EMPLOYEE HAS BEEN ENCOURAGED TO CONSULT WITH AN ATTORNEY.
EMPLOYEE ACKNOWLEDGES THAT EMPLOYEE HAS BEEN GIVEN A PERIOD OF
TWENTY-ONE (21) DAYS TO REVIEW THIS AGREEMENT WITH AN ATTORNEY AND
CONSIDER ITS EFFECT, INCLUDING EMPLOYEE'S RELEASE OF RIGHTS AND
SEPARATION. EMPLOYEE ALSO ACKNOWLEDGES THAT EMPLOYEE HAS SEVEN (7)
DAYS FOLLOWING EXECUTION OF THIS AGREEMENT TO REVOKE THIS AGREEMENT
FOR ANY REASON AND IS HEREBY ADVISED THAT THIS AGREEMENT SHALL NOT
BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EXPIRATION OF THE SEVEN (7)
DAY REVOCATION PERIOD.
IN WITNESS WHEREOF, the parties have executed this Agreement this
28th day of April, 1995.
/s/ Michael Murr
------------------------------------------------
MICHAEL MURR
/s/ Claire Jones
------------------------------------------------
Witness
PROGRESSIVE CASUALTY INSURANCE COMPANY
By: /s/ David M. Schneider
--------------------------------------------
Title: Secretary
-----------------------------------------
/s/ Cynthia E. Barth
------------------------------------------------
Witness
<PAGE> 1
EXHIBIT NO. 11
--------------
COMPUTATION OF
EARNINGS PER SHARE
<PAGE> 2
THE PROGRESSIVE CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(millions - except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
-----------------------------------------------------------------------------
Periods Ended June 30, 1995 1994 1995 1994
-----------------------------------------------------------------------------
Per Per Per Per
Amount Share Amount Share Amount Share Amount Share
-----------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
PRIMARY:
Net income $60.8 $60.5 $121.5 $108.6
Less: Preferred stock dividends (2.1) (2.1) (4.2) (4.4)
------------------------- ------------------------------
Income available to common
shareholders $58.7 $.79 $58.4 $ .79 $117.3 $1.59 $104.2 $1.40
=============================================================================
Average shares outstanding 71.8 71.5 71.7 71.8
Net effect of dilutive stock options 2.2 2.3 2.3 2.4
------------------------- ------------------------------
Total 74.0 73.8 74.0 74.2
========================= ==============================
FULLY DILUTED:
Net income $60.8 $60.5 $121.5 $108.6
Less: Preferred stock dividends (2.1) (2.1) (4.2) (4.4)
Income available to common ------------------------- ------------------------------
shareholders $58.7 $.79 $58.4 $ .79 $117.3 $1.59 $104.2 $1.40
=============================================================================
Average shares outstanding 71.8 71.5 71.7 71.8
Net effect of dilutive stock options 2.2 2.4 2.3 2.4
------------------------- ------------------------------
Total 74.0 73.9 74.0 74.2
========================= ==============================
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF INCOME AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<DEBT-HELD-FOR-SALE> 2,349,800
<DEBT-CARRYING-VALUE> 309,700
<DEBT-MARKET-VALUE> 318,800
<EQUITIES> 544,900
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 3,485,100
<CASH> 13,200
<RECOVER-REINSURE> 374,300
<DEFERRED-ACQUISITION> 183,700
<TOTAL-ASSETS> 5,079,200
<POLICY-LOSSES> 1,546,200
<UNEARNED-PREMIUMS> 1,174,700
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 675,700
<COMMON> 71,900
0
85,800
<OTHER-SE> 1,160,400
<TOTAL-LIABILITY-AND-EQUITY> 5,079,200
1,301,700
<INVESTMENT-INCOME> 90,200
<INVESTMENT-GAINS> 37,500
<OTHER-INCOME> 19,300
<BENEFITS> 931,500
<UNDERWRITING-AMORTIZATION> 220,600
<UNDERWRITING-OTHER> 84,900
<INCOME-PRETAX> 166,000
<INCOME-TAX> 44,500
<INCOME-CONTINUING> 121,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 121,500
<EPS-PRIMARY> 1.59
<EPS-DILUTED> 1.59
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
