UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT of 1934 for the quarterly period ended June 30, 1996, 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: 1-10961
-------
NATIONAL RE CORPORATION
-----------------------
(Exact name of registrant as specified in its charter)
Delaware 75-2300920
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
777 Long Ridge Road
Stamford, Connecticut 06902
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (203) 329-7700
--------------
--------------------------------------------------------------
(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.
Common Stock - no par value 16,616,894
- --------------------------- -----------------
Description of Class Shares Outstanding
as of August 12, 1996
<PAGE>
NATIONAL RE CORPORATION
Index to Form 10-Q
PART I FINANCIAL INFORMATION
Item 1 -
Consolidated balance sheets at June 30, 1996 and
December 31, 1995 1
Consolidated statements of income for the three and six
months ended June 30, 1996 and 1995 2
Consolidated statements of cash flows for the six
months ended June 30, 1996 and 1995 3
Notes to consolidated financial statements 4
Item 2 -
Management's discussion and analysis of
financial condition and results of operations 7
PART II OTHER INFORMATION 10
---------------------------------------------
<PAGE>
NATIONAL RE CORPORATION
Consolidated Balance Sheets
(Unaudited)
($ In Millions)
A S S E T S
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
-------- -----------
<S> <C> <C>
Investments, at fair value:
Fixed maturities available for sale
(amortized cost: 1996 - $1,105.8; 1995 - $1,054.1) $1,111.0 $1,092.9
Preferred stocks (cost: 1996 - $171.7; 1995 - $149.9) 173.1 155.7
Common stocks (cost: 1996 - $4.9; 1995 - $4.9) 7.7 6.2
Cash and cash equivalents 10.6 22.9
-------- --------
Total investments and cash 1,302.4 1,277.7
Reinsurance balances 231.2 225.7
Recoverable from reinsurers 83.9 84.5
Accrued investment income 18.9 20.4
Deferred acquisition costs 31.9 31.7
Future value of treaties 26.5 36.3
Deferred Federal income tax benefits 50.3 31.8
Prepaid and other assets 22.2 16.4
-------- --------
Total assets $1,767.3 $1,724.5
======== ========
L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y
Liabilities:
Unpaid losses and loss expenses $1,042.5 $1,001.7
Unearned premiums 108.6 107.7
Senior bank debt 85.5 85.5
Senior notes 125.0 125.0
Interest payable 5.8 5.3
Other liabilities 25.1 18.4
-------- --------
Total liabilities 1,392.5 1,343.6
-------- --------
Stockholders' Equity:
Preferred stock, $.01 par value, 1,000,000
shares authorized; 96,697 shares retired; issued
and outstanding in 1996 and 1995: None
Common stock, no par, 40,000,000 shares
authorized; 17,216,294 and 17,190,894 issued
in 1996 and 1995
Paid-in capital 218.2 217.9
Retained earnings 168.0 141.4
Unrealized appreciation, after tax 6.3 30.1
Cumulative translation adjustment, after tax (0.1) (0.1)
Treasury stock, at cost - 599,400 shares in 1996
and 325,300 shares in 1995 (17.6) (8.4)
-------- --------
Total stockholders' equity 374.8 380.9
-------- --------
Total liabilities and stockholders' equity $1,767.3 $1,724.5
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
-1-
<PAGE>
NATIONAL RE CORPORATION
Consolidated Statements of Income
(Unaudited)
(In Millions, 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>
Revenues:
Net premiums written $90.6 $83.7 $191.0 $171.3
Change in unearned premiums 6.7 (3.7) (0.9) (14.1)
Net premiums earned 97.3 80.0 190.1 157.2
Net investment income 20.5 18.6 40.6 36.8
Realized capital gains (losses) 0.1 (2.4) 4.3 (1.6)
Total revenues 117.9 96.2 235.0 192.4
Expenses:
Loss and loss expenses 63.9 51.4 124.9 106.3
Underwriting expenses 30.7 25.9 59.0 45.9
Interest expense 3.9 3.7 7.9 7.1
Other expenses 2.4 2.7 5.2 5.4
Total expenses 100.9 83.7 197.0 164.7
Operating income before Federal income taxes 17.0 12.5 38.0 27.7
Federal income taxes:
Current 6.5 3.8 13.4 9.7
Deferred (2.5) (1.1) (3.7) (3.3)
Total income taxes 4.0 2.7 9.7 6.4
Net income $13.0 $ 9.8 $28.3 $21.3
Weighted average shares outstanding 16.7 16.9 16.7 16.9
Net income per share $0.78 $0.58 $1.69 $1.27
</TABLE>
See accompanying notes to consolidated financial statements.
-2-
<PAGE>
NATIONAL RE CORPORATION
Consolidated Statements of Cash Flows
(Unaudited)
($ In Millions)
<TABLE>
<CAPTION>
Six Months Ended June 30,
------------------------------
1996 1995
---- ----
<S> <C> <C>
Cash Flows From Operating Activities:
Net income $28.3 $21.3
Adjustments to reconcile net income to net cash
provided by operating activities:
Amortization and depreciation 4.6 4.9
Deferred federal income tax benefits (3.7) (3.3)
Unpaid losses and loss expenses 40.8 39.7
Unearned premiums 0.9 14.1
Reinsurance balances (5.5) (22.5)
Recoverable from reinsurers 0.6 (9.1)
Deferred acquisition costs (0.2) (3.8)
Interest payable 0.5 2.6
Realized capital (gains) losses (4.3) 1.6
Other, net 8.3 10.7
----- -----
Net cash provided by operating activities 70.3 56.2
----- -----
Cash Flows From Investing Activities:
Purchases of investments (565.4) (701.0)
Sales of investments 381.7 539.7
Maturities of investments 111.8 40.1
----- -----
Net cash used by investing activities (71.9) (121.2)
----- -----
Cash Flows From Financing Activities:
Refinancing - 1994 credit agreement (100.0)
Senior notes 100.0
Refinancing fees (1.2)
Dividends to stockholders (1.6) (1.4)
Purchases of treasury stock (9.1) (4.0)
Exercises of stock options - 0.1
----- -----
Net cash used by financing activities (10.7) (6.5)
----- -----
Change in cash and cash equivalents (12.3) (71.5)
Cash and cash equivalents at beginning of period 22.9 91.7
----- -----
Cash and cash equivalents at end of period $10.6 $20.2
===== =====
Supplemental Information:
Interest Paid $ 7.5 $ 4.5
===== =====
Taxes Paid $15.4 $ 9.3
===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
NATIONAL RE CORPORATION
Notes to Consolidated Financial Statements
June 30, 1996
(Unaudited)
($ In Millions)
1. Organization and Basis of Presentation
--------------------------------------
National Re Corporation, through its principal wholly-owned subsidiary,
National Reinsurance Corporation ("National Re"), reinsures property and
casualty insurance in the United States. National Re is domiciled in the
State of Delaware and is licensed to transact business in all 50 states, the
District of Columbia, the United Kingdom and Canada. National Re's business
is concentrated in the United States, where it is one of only six major
direct writers of property and casualty reinsurance. National Re has four
subsidiaries. National Intermediaries, Inc. is a reinsurance broker
incorporated and licensed in New York. Fairfield Insurance Company is a
Connecticut domiciliary licensed in 38 states and the District of Columbia
and ultimately expects to be licensed in all 50 states. National Risk
Services, Inc. was incorporated in Connecticut in 1995 to perform risk
management, underwriting, claims advisory and other consulting services.
National Re most recently acquired Global Resolution, Inc., a New Jersey
domiciliary, to provide management consulting for running-off reinsurance
claims and liabilities.
The accompanying unaudited consolidated financial statements include the
accounts of the Company and all its subsidiaries and, in the opinion of
management, contain all adjustments necessary to present fairly the
consolidated financial position at June 30, 1996 and December 31, 1995, and
the consolidated results of operations for both the three and six months
ended June 30, 1996 and 1995 and consolidated cash flows for the six months
ended June 30, 1996 and 1995 in conformity with generally accepted
accounting principles applicable to interim periods. The preparation of
financial statements requires management to makes estimates and assumptions
that affect the reported amounts of assets and liabilities and the
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting periods. Management of the Company believes that key estimates and
assumptions used in the preparation of these financial statements are
appropriate; however, actual results could differ and, as necessary,
adjustments are recognized in current operations. The accompanying financial
statements should be read in conjunction with the audited consolidated
financial statements of the Company on its 1995 Form 10-K.
-4-
<PAGE>
2. Income Taxes
------------
The effective federal income tax rate on operating income differs from the
prevailing corporate statutory rate. A reconciliation of this difference is
as follows, in millions:
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------------------
1996 1995
--------------- ----------------
% of % of
Amount Income Amount Income
------ ------ ------ ------
<S> <C> <C> <C> <C>
Operating income before income taxes $38.0 100.0% $27.7 100.0%
===== ===== ===== =====
Provision for federal income
taxes at statutory rate $13.4 35.0% $ 9.7 35.0%
Add (deduct) effect of:
Tax-advantaged investment income (2.0) (5.3) (2.5) (9.0)
Dividends received deduction (1.6) (3.9) (1.1) (4.0)
Amortization of acquisition costs
and excess of purchase price over
fair value of net assets acquired 0.1 0.2 0.1 0.4
Other, net (0.2) (0.4) 0.2 0.7
----- ---- ----- ----
Provision for federal income taxes $ 9.7 25.6% $ 6.4 23.1%
===== ==== ===== ====
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities are
summarized below, in millions.
June 30, December 31,
1996 1995
------- -----------
Deferred tax assets:
Unpaid losses and loss expenses $70.2 $68.1
Unearned premium discount 7.6 7.5
Other 0.6 0.6
Valuation allowance - -
----- -----
Total gross deferred tax assets 78.4 76.2
----- -----
Deferred tax liabilities:
Investments (3.6) (16.5)
Deferred acquisition costs (11.1) (11.1)
Future value of treaties (9.3) (12.7)
Other (4.1) (4.1)
----- -----
Total gross deferred tax liabilities (28.1) (44.4)
----- -----
Net deferred tax asset $50.3 $31.8
===== =====
-5-
<PAGE>
3. Reinsurance
-----------
National Re places reinsurance to reduce its exposure to large losses. However,
reinsurance agreements do not relieve National Re from its obligations to
clients. National Re remains liable to clients for the portion reinsured.
To minimize its exposure to significant losses from reinsurer insolvencies,
National Re evaluates the financial condition of its reinsurers and monitors
concentrations of credit risk arising from similar geographic regions,
activities, or economic characteristics of the reinsurers. Recoverables from
foreign, non-admitted reinsurers are substantially collateralized by letters of
credit that can be drawn on for amounts remaining unpaid for extended periods.
Regarding results of operations, the effects of reinsurance were as follows, in
millions:
Six Months Ended June 30,
-------------------------
1996 1995
------ ------
Gross written premium $207.6 $189.4
Ceded written premium 16.6 18.1
------ ------
Net written premium $191.0 $171.3
====== ======
Gross earned premium $206.7 $175.3
Ceded earned premium 16.6 18.1
------ ------
Net earned premium $190.1 $157.2
====== ======
Gross loss and loss expenses $128.5 $120.1
Ceded loss and loss expenses 3.6 13.8
------ ------
Net loss and loss expenses $124.9 $106.3
====== ======
4. Subsequent Event
----------------
On July 1, 1996, National Re reached a definitive merger agreement with
General Re Corporation. Under the agreement, National Re shareholders will
have the option of receiving $53.00 per share in cash or $53.00 per share in
General Re common stock. For shareholders electing stock, the transaction is
expected to be tax free. The agreement provides for a minimum stock
component of 50 percent. There is no minimum cash component. National Re
shareholders electing to receive stock will receive no less than 0.32121 or
more than 0.39259 share of General Re common stock per share of National
Re's common stock. The merger is subject to regulatory and shareholder
approval and is expected to be completed in the fourth quarter of 1996. No
costs associated with the proposed merger have been reflected in the
Company's second quarter financial statements.
----------------------------------------------
-6-
<PAGE>
NATIONAL RE CORPORATION
Management's Discussion and Analysis
of Financial Condition and Results of Operations
June 30, 1996
Results of Operations - Quarter Ended June 30, 1996 vs. Quarter Ended
- ---------------------------------------------------------------------
June 30, 1995
- -------------
Total revenues for 1996 were $117.9 million, a 22.6% increase over 1995. Net
premiums written in 1996 were $90.6 million, an increase of $6.9 million, or
8.2% over 1995. This increase in net premiums written continues a trend that
began in the second half of 1995 and is due to increased marketing activities.
Net premiums earned were $97.3 million, or 21.6% more than 1995.
Net investment income was $20.5 million compared to $18.6 million in 1995,
an increase of $1.9 million. The improvement is due to the greater level of
invested assets. After-tax net investment income was $15.2 million in 1996
compared with $13.9 million in 1995. Realized capital gains were $0.1
million in the current quarter compared to a $2.4 million loss in 1995.
Total expenses in 1996 were $100.9 million compared to $83.7 million in
1995. Loss and loss adjustment expenses were $63.9 million in 1996 compared
to $51.4 million in 1995 due to the overall increase in business activities.
Ceded losses in the current quarter were $3.2 million, down from $6.9
million in 1995. Underwriting expenses, principally commissions paid to
primary insurers, and general and administrative costs, increased $4.8
million to $30.7 million in 1996 compared to $25.9 million in 1995.
The statutory combined ratio for the 1996 second quarter was 97.6%, down
from 98.0% in the 1995 second quarter. Under the generally accepted
accounting principles ("GAAP") basis of accounting, the combined ratios for
the 1996 and 1995 second quarters were 97.2% and 96.6%, respectively.
Pre-tax income was $17.0 million compared with $12.5 million for the like
period in 1995. The most significant factors in this increase are greater
realized capital gains and net investment income. Total taxes in 1996 were
$4.0 million compared with $2.7 million in 1995. The effective tax rates
were 23.5% and 21.8% in the 1996 and 1995 second quarters, respectively. The
higher 1996 rate was due to a higher portion of taxable securities. The
principal factors in the decline below the statutory rate of 35.0% in both
1996 and 1995 were the benefits of investments in tax-advantaged securities
and the dividends received deduction.
Results of Operations - Six Months Ended June 30, 1996 vs. Six Months Ended
- ---------------------------------------------------------------------------
June 30, 1995
- -------------
Total revenues of $235.0 million for the six months ended June 30, 1996 were
$42.6 million, or 22.1% more than the six months ended June 30, 1995. Net
premiums written in the six months ended June 30, 1996 were $191.0 million,
an increase of $19.7 million or 11.5% over the like period of 1995 due to
increased marketing efforts. Net premiums earned were $190.1 million, or
20.9% more than 1995.
-7-
<PAGE>
Net investment income in the six months ended June 30, 1996 was $40.6 million
compared to $36.8 million in the six months ended June 30, 1995, an increase
of $3.8 million. After-tax net investment income for the six months ended
June 30, 1996 increased $2.5 million to $30.0 million compared to $27.5
million in the like period of 1995. This was the result of increased
invested assets. After-tax realized capital gains were $2.8 million for the
six months ended June 30, 1996 compared to a $1.1 million loss for the like
period of 1995.
Total expenses of $197.0 million for the six months ended June 30, 1996 were
$32.3 million, or 19.6% more than the six months ended June 30, 1995. Loss
and loss adjustment expenses were $124.9 million for 1996 compared to $106.3
million in 1995 due principally to the increase in earned premiums. Ceded
losses decreased to $3.6 million in 1996 from $13.8 million in 1995.
Underwriting expenses, principally commission related expenses, totaled
$59.0 million for the six months ended June 30, 1996 compared to $45.9
million for the six months ended June 30, 1995. Interest expense increased
$0.8 to $7.9 million for the six months ended June 30, 1996 primarily due to
the replacement of floating rate debt with fixed rate senior notes issued in
1995. Other expenses, principally amortization of intangibles, were $5.2 and
$5.4 million in the 1996 and 1995 six month periods, respectively. The
statutory combined ratio for 1996 was 97.9% compared to 98.1% in 1995. The
GAAP combined ratios for 1996 and 1995 were 96.7% and 96.8%, respectively.
Current period pre-tax income was $38.0 million compared with $27.7 million
for the like period in 1995. The increase was principally due to greater
realized capital gains and net investment income. Total taxes for the six
months ended June 30, 1996 were $9.7 million compared with $6.4 million for
the six months ended June 30, 1995. The effective tax rate in 1996 was 25.6%
compared with 23.1% in 1995. The higher 1996 rate was due to a greater
portion of taxable securities.
Net income was $28.3 million for the six months ended June 30, 1996,
compared to $21.3 million for the six months ended June 30, 1995.
Reserves
- --------
Significant time often elapses between the occurrence of an insured loss,
reporting of the loss to the primary insurer and, thereafter, to the
reinsurer, and the primary insurer's payment of that loss and subsequent
indemnification by the reinsurer. To recognize liabilities for unpaid losses
and loss adjustment expenses as of the end of each accounting period,
National Re establishes reserves as balance sheet liabilities representing
estimates of amounts needed to pay reported and unreported losses and
related expenses.
As part of the reserving process, National Re's management reviews
historical data and anticipates the impact of various factors such as
legislative enactments, judicial decisions, changes in social and political
attitudes, and trends in general economic conditions, all of which may
impact the size and timing of the ultimate payment of losses. This process
assumes that past experience, adjusted for the effects of current
developments and anticipated trends, is an appropriate basis for predicting
future events. The process of establishing these reserves is based upon
generally accepted actuarial principles and standards, but, nevertheless, is
imprecise and reflects significant judgmental factors. However, management
believes that the current level of reserves is adequate to cover the
estimated liability for unpaid losses and loss expenses. The establishment
of the appropriate level of loss reserves is an inherently uncertain
process, and therefore there can be no assurance that ultimate losses and
loss expenses will not exceed the loss reserves currently established.
However, reserves are continually reviewed, and as adjustments become
necessary, they are reflected in current operations. At June 30, 1996 gross
reserves for unpaid losses and loss adjustment expenses were $1,042.5
million.
-8-
<PAGE>
Liquidity and Capital Resources - June 30, 1996
- -----------------------------------------------
The parent company's cash flow consists principally of dividends and tax
payments from National Re. National Re's cash flow from operations consists
of premiums collected, income earned on invested assets and receipt of funds
from reinsurance recoverables. Consolidated cash flow from operations for
the six months ended June 30, 1996 was $70.3, an increase of $14.1 million,
or 25.1%, over the six months ended June 30, 1995.
Total assets increased to $1,767.3 million at June 30, 1996. The fair value
of fixed maturity securities was $5.2 million greater than amortized cost at
June 30, 1996, compared to $38.8 million greater than amortized cost at
year-end. Invested assets increased $25.4 million since December 1995 due to
the reinvestment of continued strong operating cash flow, offset partially
by a decline in market values caused by rising interest rates. National Re's
portfolio at June 30, 1996 was comprised primarily of U.S. Treasury and
government agency mortgage pass-through securities, and corporate and
municipal bonds rated "A" or better. 76.8% of the bonds were rated "Aaa."
Stockholders' equity decreased to $374.8 million at June 30, 1996, compared
to $380.9 million at December 31, 1995, due to both the decrease in net
unrealized appreciation on investments and the purchases of treasury stock.
On a statutory basis, surplus increased $21.8 million to $454.1 million at
June 30, 1996.
Subsequent Event
- ----------------
On July 1, 1996, National Re reached a definitive merger agreement with
General Re Corporation. Under the agreement, National Re shareholders will
have the option of receiving $53.00 per share in cash or $53.00 per share in
General Re common stock. For shareholders electing stock, the transaction is
expected to be tax free. The agreement provides for a minimum stock
component of 50 percent. There is no minimum cash component. National Re
shareholders electing to receive stock will receive no less than 0.32121 or
more than 0.39259 share of General Re common stock per share of National
Re's common stock. The merger is subject to regulatory and shareholder
approval and is expected to be completed in the fourth quarter of 1996. No
costs associated with the proposed merger have been reflected in the
Company's second quarter financial statements.
------------------------------------------
-9-
<PAGE>
NATIONAL RE CORPORATION
PART II OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Company held the Annual Meeting of Stockholders Wednesday, May 14, 1996
beginning at 9:30 a.m. at 777 Long Ridge Road, Stamford, Connecticut. There
were represented in person or by proxy a total of 15,158,078 shares of
common stock, issued, outstanding and entitled to vote at the Annual Meeting
of Stockholders.
The Election of Directors was submitted to the stockholders for a vote and
the results were as follows:
Vote
Name For Withheld
---- --- --------
Thomas M. Bancroft, Jr. 15,094,000 64,078
Robert T. Barnum 15,094,000 64,078
David Bonderman 15,094,150 63,928
Jon A. Boscia 15,092,500 65,578
Robert W. Bruce III 15,093,700 64,378
Peter A. Cheney 15,093,850 64,228
J. Taylor Crandall 15,093,850 64,228
Daniel L. Doctoroff 15,093,850 64,228
Robert W. Eager, Jr. 15,093,850 64,228
Steven B. Gruber 15,093,850 64,228
Greg B. Kent 15,093,850 64,228
Timothy T. McCaffrey 15,093,850 64,228
Robert A. Spass 15,093,850 64,228
William D. Warren 15,094,150 63,928
----------------------------------------
-10-
<PAGE>
NATIONAL RE CORPORATION
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.
National Re Corporation
(Registrant)
/s/ William D. Warren
-----------------
William D. Warren
President and Chief Executive
Officer
/s/ Peter A. Cheney
---------------
Peter A. Cheney
Chief Financial and Accounting
Officer
Dated: August 14, 1996
-11-
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000,000
<CURRENCY> US 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> 1,111
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 181
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 1,300
<CASH> 11
<RECOVER-REINSURE> 84
<DEFERRED-ACQUISITION> 32
<TOTAL-ASSETS> 1,767
<POLICY-LOSSES> 1,043
<UNEARNED-PREMIUMS> 109
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 211
0
0
<COMMON> 0
<OTHER-SE> 375
<TOTAL-LIABILITY-AND-EQUITY> 1,767
190
<INVESTMENT-INCOME> 41
<INVESTMENT-GAINS> 4
<OTHER-INCOME> 0
<BENEFITS> 125
<UNDERWRITING-AMORTIZATION> 59
<UNDERWRITING-OTHER> 13
<INCOME-PRETAX> 38
<INCOME-TAX> 10
<INCOME-CONTINUING> 28
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 29
<EPS-PRIMARY> 1.69
<EPS-DILUTED> 1.69
<RESERVE-OPEN> 1,002
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 1,043
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
