UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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, 1997
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-16267
WALSHIRE ASSURANCE COMPANY
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2023240
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
3350 Whiteford Road, P. O. Box 3849, York, PA 17402-0138
(Address of principal executive offices) (Zip code)
(717)757-0000
(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 practical date.
Class: Outstanding at August 12, 1997:
Common stock - $.01 Par Value 4,679,943 shares
WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES
INDEX
PAGE
NUMBER
Part I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1997
(unaudited) and December 31, 1996. . . . . . . . . . 2
Consolidated Statements of Income for the three
months ended June 30, 1997 and 1996 (unaudited). . . 4
Consolidated Statements of Income for the six
months ended June 30, 1997 and 1996 (unaudited). . . 5
Consolidated Statements of Cash Flows for the six
months ended June 30, 1997 and 1996 (unaudited). . . 6
Notes to Consolidated Financial Statements
(unaudited) . . . . . . . . . . . . . . . . . . . . 7
Item 2. Management s Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . 9
Part II OTHER INFORMATION . . . . . . . . . . . . . . . . . 10
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . 10
Item 2. Changes in Securities . . . . . . . . . . . . . . . 10
Item 3. Defaults Upon Senior Securities . . . . . . . . . . 10
Item 4. Submission of Matters to Vote of Security Holders. . 11
Item 5. Other Information . . . . . . . . . . . . . . . . . 11
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
1
WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands,
except per share data)
June 30, December 31,
Assets 1997 1996
(Unaudited)
Investments:
Held to maturity:
Fixed maturities (fair value $19,360 and
$18,158) . . . . . . . . . . . . . . . . $ 19,132 $ 17,923
Available for sale:
Fixed maturities (cost $35,179 and
$37,512) . . . . . . . . . . . . . . . . 35,135 37,356
Equity securities (cost $9,983 and
$8,711). . . . . . . . . . . . . . . . . 10,065 8,930
Short-term investments . . . . . . . . . . . . 8,924 4,758
Other investments. . . . . . . . . . . . . . . 2,047 2,051
Total investments . . . . . . . . . . . . . 75,303 71,018
Cash. . . . . . . . . . . . . . . . . . . . . . . 764 637
Accrued investment income receivable. . . . . . . 846 847
Amounts receivable from reinsurers. . . . . . . . - 1,837
Amounts receivable from reinsured company . . . . 561 563
Agents balances (net of allowance for doubtful
accounts of $120). . . . . . . . . . . . . . . 6,471 8,501
Installment premiums receivable . . . . . . . . . 10,029 8,514
Agents balances and installment premiums
receivable from related parties. . . . . . . . 2,273 3,073
Premium finance receivables (net of unearned
finance charges and allowance for credit
losses of $113 and $109) . . . . . . . . . . . 4,658 4,836
Reinsurance receivable. . . . . . . . . . . . . . 26,376 19,699
Deferred acquisition costs. . . . . . . . . . . . 5,257 5,193
Property and equipment (net of accumulated
depreciation of $1,980 and $1,725) . . . . . . 4,326 4,526
Other assets. . . . . . . . . . . . . . . . . . . 1,281 1,692
Total assets. . . . . . . . . . . . . . . . $138,145 $130,936
See accompanying notes to consolidated financial statements.
2
WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES
Consolidated Balance Sheets, Continued
(In thousands,
except per share data)
June 30 December 31,
Liabilities and Shareholders Equity 1997 1996
(Unaudited)
Liabilities:
Unpaid claims and claim settlement expenses. $ 41,356 $ 36,551
Unearned premiums. . . . . . . . . . . . . . 31,814 33,250
Amounts payable to reinsurers. . . . . . . . 3,743 -
Short-term notes payable . . . . . . . . . . 8,050 7,293
Long-term notes payable. . . . . . . . . . . 720 1,076
Deposits by insureds . . . . . . . . . . . . 2,382 2,380
Commissions payable to agents. . . . . . . . 1,806 1,681
Commissions payable to related parties . . . 274 401
Other liabilities. . . . . . . . . . . . . . _ 744 1,470
Total liabilities . . . . . . . . . . . . 90,889 84,102
Shareholders equity:
Preferred stock, par value $.01 per share;
2,000 shares authorized; 128 shares
issued and outstanding. . . . . . . . . . 1 1
Common stock, par value $.01 per share;
10,000 shares authorized; 4,678 and
4,651 shares issued and outstanding . . . 47 47
Additional paid-in capital . . . . . . . . . 38,764 38,648
Unrealized gains on investments available
for sale (net of deferred taxes of $0 and
$21). . . . . . . . . . . . . . . . . . . 38 42
Retained earnings. . . . . . . . . . . . . . 8,406 8,096
Shareholders equity. . . . . . . . . . . 47,256 46,834
Total liabilities and shareholders equity . $138,145 $130,936
See accompanying notes to consolidated financial statements.
3
WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands,
except per share data)
Three Months Ended
June 30,_____
1997 1996
(Unaudited)(Unaudited)
Revenues:
Premiums earned . . . . . . . . . . . . . . . . . $15,904 $ 14,386
Premiums ceded. . . . . . . . . . . . . . . . . . ( 4,726) ( 3,004)
Net premiums earned . . . . . . . . . . . . . . . 11,178 11,382
Net investment income . . . . . . . . . . . . . . 1,069 742
Net realized gains on investments . . . . . . . . 757 702
Other . . . . . . . . . . . . . . . . . . . . . . 169 187
Total revenues . . . . . . . . . . . . . . . . 13,173 13,013
Expenses:
Claims and claim settlement expenses. . . . . . . 11,879 8,380
Reinsurance recoveries. . . . . . . . . . . . . . ( 3,279) ( 952)
Net claims and claim settlement expenses. . . . . 8,600 7,428
Amortization of deferred acquisition costs. . . . 1,728 1,724
Underwriting, general and administrative
expenses. . . . . . . . . . . . . . . . . . . . 2,121 1,875
Dividends to policyholders. . . . . . . . . . . . - 117
Interest. . . . . . . . . . . . . . . . . . . . . 175 91
Total expenses . . . . . . . . . . . . . . . . 12,624 11,235
Income before income taxes . . . . . . . . . . . . . 549 1,778
Provision for income taxes . . . . . . . . . . . . . 92 377
Net income . . . . . . . . . . . . . . . . . . . . . 457 1,401
Less dividends on convertible preferred stock. . . . 104 108
Net income available for common stock. . . . . . . . $ 353 $ 1,293
Net income per common share and common equivalent
share:
Primary:
Net income . . . . . . . . . . . . . . . . . . $ .07 $ .27
Weighted average shares outstanding. . . . . . 4,780 4,790
Fully diluted:
Net income . . . . . . . . . . . . . . . . . . $ .07 $ .26
Weighted average shares outstanding. . . . . . 4,780 5,392
See accompanying notes to consolidated financial statements.
4
WALSHIRE ASSURANCE COMPANY
AND SUBSIDIARIES
Consolidated Statements of Income
(In thousands,
except per share data)
Six Months Ended
June 30,_____
1997 1996
(Unaudited)(Unaudited)
Revenues:
Premiums earned . . . . . . . . . . . . . . . . . $31,550 $ 28,177
Premiums ceded. . . . . . . . . . . . . . . . . . ( 8,225) ( 6,059)
Net premiums earned . . . . . . . . . . . . . . . 23,325 22,118
Net investment income . . . . . . . . . . . . . . 2,051 1,473
Net realized gains on investments . . . . . . . . 1,393 769
Other . . . . . . . . . . . . . . . . . . . . . . 332 362
Total revenues . . . . . . . . . . . . . . . . 27,101 24,722
Expenses:
Claims and claim settlement expenses. . . . . . . 22,692 16,767
Reinsurance recoveries. . . . . . . . . . . . . . ( 4,999) ( 1,689)
Net claims and claim settlement expenses. . . . . 17,693 15,078
Amortization of deferred acquisition costs. . . . 3,328 3,386
Underwriting, general and administrative
expenses. . . . . . . . . . . . . . . . . . . . 4,357 3,688
Dividends to policyholders. . . . . . . . . . . . - 117
Interest. . . . . . . . . . . . . . . . . . . . . 365 173
Total expenses . . . . . . . . . . . . . . . . 25,743 22,442
Income before income taxes . . . . . . . . . . . . . 1,358 2,280
Provision for income taxes . . . . . . . . . . . . . 234 382
Net income . . . . . . . . . . . . . . . . . . . . . 1,124 1,898
Less dividends on convertible preferred stock. . . . 208 216
Net income available for common stock. . . . . . . . $ 916 $ 1,682
Net income per common share and common equivalent
share:
Primary:
Net income . . . . . . . . . . . . . . . . . . $ .19 $ .35
Weighted average shares outstanding. . . . . . 4,811 4,775
Fully diluted:
Net income . . . . . . . . . . . . . . . . . . $ .19 $ .35
Weighted average shares outstanding. . . . . . 4,811 5,372
See accompanying notes to consolidated financial statements.
5
WA LSHIRE ASSURANCE COMPANY AND SUBSIDIARIES
Co nsolidated Statements of Cash Flows
(In thousands)
except per share data)
Six Months Ended
June 30, _______
1997 1996
(Unaudited) (Unaudited)
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . $ 1,124 $ 1,898
Adjustments to reconcile net income to net
cash provided by operating activities
Net realized gains on investments. . . . . . . ( 1,393) ( 769)
Decrease (increase) in assets:
Accrued investment income receivable. . . . . 1 3
Amounts receivable from reinsurers. . . . . . 1,837 1,227
Amounts receivable from reinsured company . . 2 ( 916)
Agents balances and installment premiums
receivable . . . . . . . . . . . . . . . . . 515 (4,382)
Agents balances and installment premiums
receivable from related parties. . . . . . . 800 191
Premium finance receivables . . . . . . . . . 178 698
Reinsurance receivables . . . . . . . . . . . ( 6,677) (4,454)
Deferred acquisition costs. . . . . . . . . . ( 64) ( 345)
Other, net. . . . . . . . . . . . . . . . . . 760 ( 721)
(Decrease) increase in liabilities:
Unpaid claims and claim settlement expenses . 4,805 7,132
Unearned premiums . . . . . . . . . . . . . . ( 1,436) 1,967
Amounts payable to reinsurers . . . . . . . . 3,743 -
Deposits by insureds. . . . . . . . . . . . . 2 804
Other, net. . . . . . . . . . . . . . . . . . ( 739) ( 268)
Net cash provided by operating activities. . . . . 3,458 2,065
Cash flows from investing activities:
Purchase of investments:
Held to maturity . . . . . . . . . . . . . . . . ( 2,340) (1,377)
Available for sale . . . . . . . . . . . . . . . (15,750) (8,324)
Sale of investments:
Available for sale . . . . . . . . . . . . . . . 17,451 3,456
Maturity of investments. . . . . . . . . . . . . . 1,781 2,528
Net (purchase) sale of short term and other
investments. . . . . . . . . . . . . . . . . . . ( 4,120) ( 494)
Purchase of property and equipment . . . . . . . . ( 155) ( 772)
Sale of property and equipment . . . . . . . . . . 12 9
Other, net . . . . . . . . . . . . . . . . . . . . 88 417
Net cash (used in) investing activities. . . . . ( 3,033) (4,557)
Cash flows from financing activities:
Cash dividends paid. . . . . . . . . . . . . . . . ( 815) ( 750)
Issuance of common stock . . . . . . . . . . . . . 116 618
Proceeds from notes payable . . . . . . . . . . . 700 3,229
Payment of notes payable . . . . . . . . . . . . . ( 299) ( 240)
Net cash provided by (used in) financing
activities . . . . . . . . . . . . . . . . . . ( 298) 2,857
Net increase in cash . . . . . . . . . . . . . . . . 127 365
Cash at beginning of the period. . . . . . . . . . . 637 99
Cash at end of the period. . . . . . . . . . . . . . $ 764 $ 464
See accompanying notes to consolidated financial statements.
6
WALSHIRE ASSURANCE COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. The consolidated balance sheet as of June 30, 1997, the consolidated
statements of income for the three and six months ended June 30, 1997 and 1996,
and the consolidated statements of cash flows for the six months then ended have
been prepared by Walshire Assurance Company ( the Company ) without audit. In
the opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations and cash flows at June 30, 1997 and for all periods presented, have
been made.
2. Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been omitted. It is suggested that these unaudited consolidated financial
statements be read in conjunction with the financial statements and notes
thereto
included in the Company s 1996 Annual Report. The results of operations for the
period ended June 30, 1997 are not necessarily indicative of the results of
operations for the full year.
3. Net income per common share is computed after recognition of preferred stock
dividend requirements and is based on the weighted average number of shares of
common stock and common stock equivalents outstanding. The number of common
shares was increased by the number of shares issuable on the exercise of options
when the market price of the common stock exceeds the exercise price of the
options. This increase in the number of common shares was reduced by the number
of common shares that are assumed to have been purchased with the proceeds from
the exercise of the options; these purchases were assumed to have been made at
the average price of the common stock during that part of the year when the
market price of the common stock exceeded the exercise price of the options.
Fully diluted net income per share was determined on the assumption that
the convertible preferred stock was converted and the outstanding stock options
were exercised on January 1, 1996. As to the preferred stock, net income was
adjusted for dividends declared. As to the options, outstanding shares were
increased as described above except that purchases of common stock are assumed
to have been made at the higher of the period-end price or the average price of
the common stock during that part of the year when the market price of the
common
stock exceeded the exercise price of the options.
FASB Statement No. 128, Earnings Per Share (Statement 128) supersedes APB
Opinion No. 15, Earnings Per Share, and specifies the computation, presentation,
and disclosure requirements for earnings per share (EPS) for entities with
publicly held common stock or potential common stock. Statement 128 was issued
to simplify the computation of EPS and to make the U.S. standard more compatible
with the EPS standards of other countries and that of the International
Accounting Standards Committee (IASC). It also requires dual presentation of
Basic EPS and Diluted EPS on the face of the income statement for all entities
with complex capital structures and requires a reconciliation of the numerator
and denominator of the Basic EPS computation to the numerator and denominator of
the Diluted EPS computation.
Basic EPS, unlike Primary EPS, excludes all dilution while Diluted EPS,
like Fully Diluted EPS, reflects the potential dilution that could occur if
securities or other contracts to issue common stock were exercised or converted
into common stock or resulted in the issuance of common stock that then shared
in the earnings of the entity. For many entities Basic EPS will be higher than
Primary EPS and Diluted EPS will be approximately the same as Fully Diluted
EPS.
7
Statement 128 is effective for financial statements for both interim and
annual periods ending after December 15, 1997. Management does not expect that
the adoption of Statement 128 will have a material impact on its earnings per
share.
FASB Statement No. 130, "Comprehensive Income", was issued and established
standards for the reporting and disclosure of comprehensive income and its
components (revenues, expenses, gains and losses). The statement requires that
all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements. The statement
requires that an enterprise (a) classify items of other comprehensive income by
their nature in a financial statement and (b) display the accumulated balance of
other comprehensive income separately from retained earnings and additional
paid-
in capital in the equity section of a statement of financial position. The
statement is effective for fiscal years beginning after December 15, 1997. The
Company will adopt the statement in 1998.
FASB Statement No. 131, "Disclosures about Segments of an Enterprise and
Related Information", was issued and established standards for the way that
public business enterprises report information about operating segments in
annual
financial statements. The statement requires that those enterprises report
selected information about operating segments in interim financial reports
issued
to stockholders. It also establishes standards for related disclosures about
products and services, geographic areas and major customers. The statement is
effective for fiscal years beginning after December 15, 1997. The Company is in
the process of determining the effect of this statement upon its financial
reporting requirements.
5. Forward Looking Statements. The information contained in this Quarterly
Report contains forward looking statements (as such term is defined in the
Securities Exchange Act of 1934 and the regulations thereunder), including
without limitation, statements as to the allowances for doubtful accounts and
credit losses, reserves for unpaid claims and claim settlement expenses, the
classification of the Company's investment portfolio and other statements as to
management's beliefs, expectations or opinions. Such forward looking statements
are subject to risks and uncertainties and may be affected by various factors
which may cause actual results to differ materially from those in the forward
looking statements. Certain of these risks, uncertainties and other factors are
discussed in this Quarterly Report or in the Company's Annual Report on
Form 10-K
for the year ended December 31, 1996, a copy of which may be obtained from the
Company upon request and without charge (except for the exhibits thereto).
6. Investment Considerations. In analyzing whether to make, or to continue,
an investment in the Company, investors should consider, among other factors,
certain investment considerations more particularly described in the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.
8
Item 2. Management s Discussion and Analysis of Financial Condition and
Results of Operations
Revenues for the three month period ended June 30, 1997 increased $.2 million,
or 1.2%, from revenues for the three month period ended June 30, 1996. This
increase was primarily the result of an increase in net investment income.
Direct
premiums written decreased $.6 million, or 3.8%, in the three month period ended
June 30, 1997 when compared to the same period in 1996.
Decreases in auto liability, auto physical damage, workers' compensation and
inland marine direct premiums written resulted from additional competition as
well as rate reductions. Increases in homeowners and other lines were primarily
the result of the acquisition of Yorktowne Insurance Company in September of
1996. The following table sets forth the direct premiums written by the Company
for the three month periods ended June 30, 1997 and 1996 by line of business.
(In thousands)
Three months ended June 30,
1997 1996 %Change
Auto liability $ 6,632 $ 6,954 ( 4.6)%
Auto physical damage 4,637 5,878 ( 21.1)%
Workers compensation 777 1,323 ( 41.2)%
Inland marine 735 883 ( 16.8)%
Homeowners 749 - N/M
Other 1,201 267 349.8 %
Total $14,731 $15,305 ( 3.8)%
Expenses for the three month period ended June 30, 1997 increased $1.4 million,
or 12.4%, over expenses for the three month period ended June 30, 1996. The
increase was the result of increases in net claims and claim settlement expenses
and underwriting, general and administrative expenses. Increases in net claims
and claim settlement expenses were the result of an increase in the statutory
loss ratio from 66.5% in 1996 to 78.4% in 1997. The increase in the loss ratio
was due primarily to an increase in the loss ratio of the Company's auto
liability and auto physical damage products. Increases in underwriting, general
and administrative expenses were primarily the result of the additional
operating expenses of Yorktowne Insurance Company, which was
acquired in September of 1996. The statutory combined ratio for the three month
period ended June 30, 1997 was 117.5%, an increase from 94.4% for the three
month period ended June 30, 1996.
Revenues for the six month period ended June 30, 1997 increased $2.4 million,
or 9.6%, from revenues for the six month period ended June 30, 1996. This
increase was primarily the result of increases in premiums earned, net
investment
income and net realized gains on investments. Direct premiums written increased
$1.4 million, or 4.6%, in the six month period ended June 30, 1997 when compared
to the same period in 1996. The following table sets forth the direct premiums
written by the Company for the six month periods ended June 30, 1997 and 1996 by
line of business.
(In thousands)
Six months ended June 30,
1997 1996 %Change
Auto liability $14,258 $13,119 8.7 %
Auto physical damage 9,535 11,410 ( 16.4)%
Workers compensation 1,955 3,111 ( 37.2)%
Inland marine 1,759 1,739 1.2 %
Homeowners 1,339 - N/M
Other 2,265 365 520.6 %
Total $31,111 $29,744 4.6 %
9
Expenses for the six month period ended June 30, 1997 increased $3.3 million,
or 14.7%, over expenses for the six month period ended June 30, 1996. The
increase was primarily the result of increases in net claims and claim
settlement
expenses and underwriting, general and administrative expenses.
Increases in net claims and claim settlement expenses were the result of
increases in earned premiums, and an increase in the statutory loss ratio from
69.5% in 1996 to 77.4% in 1997. The increase in the loss ratio was due primarily
to an increase in the loss ratio of the Company's auto liability and auto
physical damage products. Increases in underwriting, general and administrative
expenses were primarily the result of the additional operating expenses of
Yorktowne Insurance Company, which was acquired in September of 1996. The
statutory combined ratio for the six month period ended June 30, 1997
was 111.1%,
an increase from 98.1% for the six month period ended June 30, 1996.
Liquidity and Capital Resources
Historically, the Company has generated funds sufficient to support its
operations and has maintained a high degree of liquidity in its investment
portfolio. The primary sources of funds to meet the demands of claim
settlements
and operating expenses are premiums, ceding commissions, investment income and
existing lines of credit. The Company s funds generally are invested in
securities with maturities intended to provide adequate funds to pay claims and
expenses without the forced sale of investments. The Company believes that its
current cash and short term investments, together with funds generated from
operations, will be sufficient to meet its operating and capital requirements
for the foreseeable future.
Part II OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
10
Item 4. Submission of Matter to a Vote of Security Holders
The Annual Meeting of Shareholders was held on May 21, 1997. The
only matter to be voted upon at the meeting was the election of
two directors for a term of three years. The results of the
election were as follows:
Charles W. Hash, Jr. Kenneth R. Taylor
Voting For 3,327,767 3,094,170
Voting against
or withheld 39,071 272,668
Abstentions and
Broker
non-votes 1,295,688 1,295,688
The terms of the following directors will expire in:
(a) 1998
1. L. Edward Sausman
2. William R. Tierney, Jr.
(b) 1999
1. Peter D. Bennett
2. John J. Buchan, Jr.
3. Gary J. Orndorff
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
Exhibits
(a) Exhibit 27.1 Financial data schedule
Reports on Form 8-K
None
11
SIGNA TURES
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WALSHIRE ASSURANCE COMPANY
(Registrant)
DATE: August 13, 1997 /s/ Kenneth R. Taylor
Kenneth R. Taylor
Chairman, President and Chief
Executive Officer
DATE: August 13, 1997 /s/ Gary J. Orndorff
Gary J. Orndorff
Vice President/Treasurer
and Chief Financial Officer
12
SIGNATURES
Pursuant to the requirements of Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
WALSHIRE ASSURANCE COMPANY
(Registrant)
DATE: August 13, 1997 __________________________
Kenneth R. Taylor
Chairman, President and Chief
Executive Officer
DATE: August 13, 1997 __________________________
Gary J. Orndorff
Vice President/Treasurer
and Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<DEBT-HELD-FOR-SALE> 35,135
<DEBT-CARRYING-VALUE> 19,132
<DEBT-MARKET-VALUE> 19,360
<EQUITIES> 10,065
<MORTGAGE> 103
<REAL-ESTATE> 0
<TOTAL-INVEST> 75,303
<CASH> 764
<RECOVER-REINSURE> 561
<DEFERRED-ACQUISITION> 5,257
<TOTAL-ASSETS> 138,145
<POLICY-LOSSES> 41,356
<UNEARNED-PREMIUMS> 31,814
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 2,382
<NOTES-PAYABLE> 8,770
<COMMON> 47
0
1
<OTHER-SE> 47,208
<TOTAL-LIABILITY-AND-EQUITY> 138,145
23,325
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</TABLE>
