================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
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FORM 10-Q
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(X) QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT of 1934
for the quarterly period ended March 31, 1998, or
(_) TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934 for the transition
period from _______ to _______.
For the Quarter Ended March 31, 1998 Commission file number 1-11688
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American Re Corporation
(Exact name of registrant as specified in its charter)
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Delaware 13-3672116
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
555 College Road East
Princeton, New Jersey 08543-5241
- ---------------------------------------- ----------
(Address of principal executive offices) (zip code)
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Registrant's telephone number, including area code: (609) 243-4200
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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 -$.01 par value 149.49712
- ---------------------------- ----------
Description of Class Shares Outstanding
as of May 14, 1998
<PAGE>
AMERICAN RE CORPORATION
Index To Form 10-Q
PART I FINANCIAL INFORMATION
Item 1 -
Page
----
Consolidated balance sheets at March 31, 1998 (unaudited),
and December 31, 1997 ....................................... 1
Consolidated statements of income for the three-month
periods ended March 31, 1998, and 1997 (unaudited) .......... 2
Consolidated statements of cash flows for the three-month
periods ended March 31, 1998, and 1997 (unaudited) .......... 3
Notes to consolidated interim financial statements ............ 4
Item 2 -
Management's discussion and analysis of
the Company's Results of Operations and Financial Condition . 6
PART II OTHER INFORMATION ................................................. 9
<PAGE>
PART I. FINANCIAL INFORMATION
AMERICAN RE CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in millions, except share amounts)
<TABLE>
<CAPTION>
(unaudited)
March 31, 1998 December 31, 1997
Assets: ----------------------------------
<S> <C> <C>
Investments
Fixed Maturities
Bonds available for sale, at fair value
(amortized cost:
March 31, 1998 - $6,778.9; December 31, 1997 - $6,481.4) $ 6,902.4 $ 6,644.2
Preferred stock available for sale, at fair value
(amortized cost:
March 31, 1998 - $61.8; December 31, 1997 - $70.8) ..... 62.3 71.4
Equity securities available for sale, at fair value
(cost: March 31, 1998 - $297.2; December 31, 1997 - $275.2) . 340.4 293.3
Other invested assets ......................................... 19.4 22.9
Cash and cash equivalents ....................................... 368.3 641.6
---------------------------
Total investments and cash .................................. 7,692.8 7,673.4
Accrued investment income ....................................... 92.2 93.9
Premiums and other receivables .................................. 1,243.4 1,083.6
Deferred policy acquisition costs ............................... 385.7 356.7
Reinsurance recoverables on paid and unpaid losses .............. 2,590.7 2,491.7
Funds held by ceding companies .................................. 397.4 383.0
Prepaid reinsurance premiums .................................... 174.7 156.8
Deferred federal income taxes ................................... 175.8 185.6
Other assets .................................................... 826.6 864.1
---------------------------
Total assets ................................................ $13,579.3 $13,288.8
===========================
Liabilities:
Loss and loss adjustment expense reserves ....................... $ 7,560.1 $ 7,508.9
Unearned premium reserve ........................................ 1,406.9 1,299.1
---------------------------
Total insurance reserves .................................... 8,967.0 8,808.0
Loss balances payable ........................................... 260.7 217.6
Funds held under reinsurance treaties ........................... 272.2 243.3
Senior bank debt ................................................ 75.0 75.0
Senior notes .................................................... 498.5 498.5
Other liabilities ............................................... 608.9 622.5
---------------------------
Total liabilities ........................................... 10,682.3 10,464.9
---------------------------
Company-obligated mandatorily redeemable preferred
securities of subsidiary trust holding as all of
its assets Junior Subordinated Debentures ..................... 237.5 237.5
---------------------------
Stockholders' Equity:
Common stock, par value: $0.01 per share; authorized:
1,000 shares; issued and outstanding: March 31,
1998, and December 31, 1997 - 149.49712 shares ................ -- --
Additional paid-in capital ...................................... 1,332.4 1,332.4
Retained earnings ............................................... 1,254.5 1,171.6
Accumulated other comprehensive income .......................... 72.6 82.4
---------------------------
Total stockholders' equity .................................. 2,659.5 2,586.4
---------------------------
Total liabilities, Company-obligated mandatorily
redeemable preferred securities of subsidiary
trust and stockholders' equity ............................ $13,579.3 $13,288.8
===========================
</TABLE>
See accompanying notes to consolidated interim financial statements.
<PAGE>
AMERICAN RE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(Dollars in millions)
(unaudited)
<TABLE>
<CAPTION>
Three-month period ended March 31,
1998 1997
----------------------------------
<S> <C> <C>
Revenue:
Premiums written ......................................... $682.3 $840.6
Change in unearned premium reserve ....................... (89.4) (186.3)
-----------------------
Premiums earned ........................................ 592.9 654.3
Net investment income .................................... 110.6 103.6
Net realized capital gains ............................... 31.9 8.5
Other income ............................................. 11.4 10.8
-----------------------
Total revenue .......................................... 746.8 777.2
-----------------------
Losses and expenses:
Losses and loss adjustment expenses ...................... 395.4 449.9
Commission expense ....................................... 138.7 155.2
Operating expense ........................................ 55.2 55.7
Interest expense ......................................... 10.5 11.2
Other expense ............................................ 23.8 26.8
-----------------------
Total losses and expenses .............................. 623.8 698.8
-----------------------
Income before income taxes, minority interest and
distributions on preferred securities of
subsidiary trust ..................................... 123.2 78.4
Federal and foreign income taxes ......................... 37.0 15.3
-----------------------
Income before minority interest and distributions on
preferred securities of subsidiary trust ............ 86.2 63.1
Minority interest ........................................ -- (7.1)
Distributions on preferred securities of subsidiary trust,
net of applicable income tax of $1.7 ................... (3.3) (3.3)
-----------------------
Net income to common stockholders .................... $ 82.9 $ 52.7
=======================
</TABLE>
See accompanying notes to consolidated interim financial statements.
- 2 -
<PAGE>
AMERICAN RE CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in millions)
(unaudited)
<TABLE>
<CAPTION>
Three-month period ended March 31,
1998 1997
----------------------------------
<S> <C> <C>
Cash Flows From Operating Activities:
Net income .............................................. $ 82.9 $ 52.7
Adjustments to reconcile net income to net cash
provided by operating activities:
Decrease in accrued investment income ................. 1.7 12.6
Increase in premiums and other receivables ............ (159.8) (31.1)
Increase in deferred policy acquisition costs ......... (29.0) (32.2)
Increase in insurance reserves ........................ 159.0 69.8
Increase in current and deferred federal and
foreign income tax assets .......................... 44.6 15.8
Decrease (increase) in other assets and
liabilities, net .................................... (29.2) 28.3
Depreciation expense on property and equipment ........ 2.1 3.0
Net realized capital gains ............................ (31.9) (8.5)
Decrease (increase) in other, net ..................... 3.8 16.5
------------------------
Net cash provided by operating activities ............ 44.2 126.9
------------------------
Cash Flows From Investing Activities:
Investments available for sale:
Purchases ............................................. (2,376.4) (1,251.6)
Maturities ............................................ 101.2 119.2
Sales ................................................. 1,963.5 933.6
Other investments:
Purchases ............................................. (1.1) (0.4)
Sales ................................................. -- 1.5
Cost of additions to property and equipment ............. (4.8) (6.0)
------------------------
Net cash provided by (used in) investing activities .. (317.6) (203.7)
------------------------
Effect of exchange rate changes on cash and cash equivalents 0.1 (3.5)
------------------------
Net increase in cash and cash equivalents ............ (273.3) (80.3)
Cash and cash equivalents, beginning of period ............. 641.6 553.1
------------------------
Cash and cash equivalents, end of period ................... $ 368.3 $ 472.8
========================
</TABLE>
See accompanying notes to consolidated interim financial statements.
- 3 -
<PAGE>
AMERICAN RE CORPORATION
Notes to Consolidated Interim Financial Statements
March 31, 1998
(Dollars in millions)
(unaudited)
1. Basis of Presentation
American Re Corporation ("American Re" or the "Company") primarily acts as
the holding company for American Re-Insurance Company ("American
Re-Insurance"). American Re-Insurance underwrites property and casualty
reinsurance on a direct basis in both the domestic and international
markets. The Company is a 91% owned subsidiary of Munich Reinsurance
Company ("Munich Re"), a company organized under the laws of Germany.
In July 1997, the Company and Munich Re completed a series of transactions
that combined the U.S. operations of Munich Re into American Re-Insurance
(the "Merger"). As a result of these transactions the Company's
consolidated statement of income for the period ended March 31, 1997 has
been restated from that originally filed in the Form 10-Q for the period
then ended.
The information for the interim periods ended March 31, 1998, and 1997, is
unaudited. The interim consolidated financial statements have been
prepared on the basis of generally accepted accounting principles and, in
the opinion of management, reflect all adjustments (consisting of normal
recurring accruals) necessary for a fair presentation of results for such
periods. The results of operations and cash flows for any interim period
are not necessarily indicative of results for the full year. Intercompany
accounts and transactions have been eliminated. These financial statements
should be read in conjunction with the financial statements and related
notes in the Company's 1997 Form 10-K.
2. Application of New Accounting Standard
Effective January 1, 1998, the Company adopted Financial Accounting
Standard No. 130 ("FAS No. 130"), "Reporting Comprehensive Income." FAS
No. 130 establishes standards for the reporting and display of
comprehensive income and its components in financial statements. FAS 130
requires unrealized gains and losses on investments, unrealized foreign
currency translation adjustments, and minimum pension liability
adjustments, if any, to be included as components of other comprehensive
income. Prior to the adoption of FAS 130 these amounts were reported as
separate components in stockholders' equity. Prior years financial
statements have been reclassified to conform with the requirements of FAS
130. Total comprehensive income was $73.1 for the three-month periods
ended March 31, 1998, compared to a loss of $20.3 for the same period in
1997. The adoption of this statement had no financial impact on the
Company's net income or stockholders' equity. The components of
accumulated other comprehensive income are as follows:
Net Net
unrealized unrealized
appreciation loss on
of foreign
investments exchange Total
------------ ---------- -----
Balance at December 31, 1997 $118.0 $(35.6) $ 82.4
Period change ........... (9.3) (0.5) (9.8)
------ ------ ------
Balance at March 31, 1998 .. $108.7 $(36.1) $ 72.6
====== ====== ======
- 4 -
<PAGE>
AMERICAN RE CORPORATION
Notes to Consolidated Interim Financial Statements
March 31, 1998
(Dollars in millions)
(unaudited)
3. Reinsurance
The Company reinsures certain risks to limit its exposure to catastrophes
and large or unusually hazardous risks. Although reinsurance agreements
contractually obligate the Company's reinsurers to reimburse it for the
agreed-upon portion of its gross paid losses, they do not discharge the
primary liability of the Company. The income statement amounts for
premiums written, premiums earned and losses and loss adjustment expenses
are net of reinsurance. Direct, assumed, ceded and net amounts for these
items are as follows:
Three-month period ended March 31,
1998 1997
----------------------------------
Premiums written
Direct ...... $ 37.2 $ 33.9
Assumed ..... 806.5 891.1
Ceded ....... (161.4) (84.4)
--------------------
Net ......... 682.3 840.6
====================
Premiums earned
Direct ...... 35.4 23.5
Assumed ..... 702.4 747.4
Ceded ....... (144.9) (116.6)
--------------------
Net ......... 592.9 654.3
====================
Losses incurred
Direct ...... 23.0 13.7
Assumed ..... 465.8 343.5
Ceded ....... (93.4) 92.7
--------------------
Net ......... $395.4 $449.9
=====================
-5-
<PAGE>
MANAGEMENTS' DISCUSSION AND ANALYSIS OF THE COMPANY'S RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 1998, COMPARED WITH QUARTER ENDED MARCH 31, 1997
The Company's net premiums written decreased 18.8% to $682.3 million for
the quarter ended March 31, 1998, from $840.6 million for the same period in
1997. The decrease in net premiums written was generally attributable to what
the Company perceives to be deteriorating market conditions. As a result, the
Company experienced a 24.0% decrease in treaty net premiums written to $487.5
million for the first quarter of 1998 from $641.7 million for the same period in
1997. The decrease in treaty premiums was primarily attributable to the
Company's Domestic Insurance Company Operations ("DICO") which decreased 29.4%
to $316.4 million for the first quarter of 1998, from $448.4 million for the
same period in 1997, and the Company's International Operations, which decreased
25.3% to $104.6 million for the first quarter of 1998, from $140.0 million for
the same period in 1997. The decrease in DICO was primarily attributable to the
non-renewal of and decreases in the amounts ceded to American Re-Insurance under
several traditional and finite risk treaty programs in 1998, in addition to the
rescission of a large retrocession in 1997, which increased prior period net
writings. The decrease in International Operations net premiums written was
primarily attributable to the assumption by Munich Re of certain business
previously written by the Company. Facultative net premiums written decreased
2.1% to $194.8 million for the first quarter of 1998 from $198.9 million for the
same period in 1997.
The Company's net premiums earned decreased 9.4% to $592.9 million for the
quarter ended March 31, 1998, from $654.3 million for the same period in 1997.
The decrease in premiums earned was primarily attributable to the decrease in
premiums written in the first quarter of 1998, partially offset by the timing of
premiums earned on business in force.
Net losses and LAE incurred decreased 12.1% to $395.4 million for the
quarter ended March 31, 1998, from $449.9 million for the same period in 1997.
This decrease was primarily attributable to the decrease in earned premium
exposures in the first quarter of 1998, in addition to a change in the Company's
mix of business to include less excess of loss finite risk business, which
generally includes a higher overall loss ratio.
Underwriting expense, consisting of commission expense plus operating
expense, decreased 8.1% to $193.9 million for the quarter ended March 31, 1998 ,
from $210.9 million for the same period in 1997. This decrease was due to a
10.6% decrease in commission expense to $138.7 million for the first quarter of
1998 from $155.2 million for the same period in 1997. This decrease was
partially due to the decrease in premiums earned in the first quarter of 1998,
in addition to the non-renewal or decreases of several large domestic quota
share treaties with higher than average commission ratios. Operating expenses
decreased slightly to $55.2 million for the first quarter of 1998 from $55.7
million for the first quarter of 1997.
The Company experienced an underwriting gain (net premiums earned minus
losses and LAE incurred and underwriting expenses) of $3.6 million for the
quarter ended March 31, 1998, compared to an underwriting loss of $6.5 million
for the same period in 1997. On a GAAP basis, the Company's loss ratio decreased
to 66.7% for the first quarter of 1998 from 68.8% for the same period in 1997,
while the underwriting expense ratio increased to 32.7% for the first quarter of
1998 from 32.2% for the same period in 1997. As a result of these changes, the
combined ratio for the quarter ended March 31, 1998, decreased to 99.4% from
101.0% for the same period in 1997.
Net investment income increased 6.8% to $110.6 million for the quarter
ended March 31, 1998, from $103.6 million for the same period in 1997. This
increase is attributable to an increase in the Company's invested asset base in
the 1998 period, as compared to the 1997 period.
-6-
<PAGE>
The Company's interest expense decreased 6.2% to $10.5 million for the
quarter ended March 31, 1998, from $11.2 million for the same period in 1997.
This decrease was primarily attributable to an overall decrease in the interest
rates charged on the Company's revolving credit senior bank debt.
The Company realized net capital gains of $31.9 million for the quarter
ended March 31, 1998, compared to net capital gains of $8.5 million for the same
period in 1997. This change was primarily due to the Company's investment
strategy, which includes increasing tax-exempt investment holdings, and
consolidation of bond holdings into overall larger positions. The 1998 period
included net capital gains of $36.6 million on the sale of bonds, offset by the
$4.6 million write-down of an other invested asset holding, as the decline in
fair value of this security is considered to be other than temporary, compared
to $1.5 million on the sale of bonds and $10.4 million on the sale of common
stocks in the 1997 period, offset by a $3.5 million write-down of a preferred
stock holding.
Other income increased 5.6% to $11.4 million for the quarter ended March
31, 1998, from $10.8 million for the same period in 1997. Other expenses
decreased 11.2% to $23.8 million for the first quarter of 1998 from $26.8
million for the same period in 1997. This decrease was primarily attributable to
the inclusion of one-time charges, primarily related to the Merger, of $9.5
million in the quarter ended March 31, 1997. This decrease was partially offset
by an expense of $5.1 million related to the Company's long term incentive
compensation program for the quarter ended March 31, 1998; there was no
comparable charge in the 1997 period, as the program was adopted in the second
quarter of 1997.
Income before income taxes, minority interest, and distributions on
preferred securities increased by 57.1% to $123.2 million for the quarter ended
March 31, 1998, from $78.4 million for the same period in 1997. Federal and
foreign income taxes increased to $37.0 million for the quarter ended March 31,
1998, from $15.3 million for the same period in 1997. This increase is primarily
attributable the recognition of net operating loss carryforwards in the 1997
period, which reduced the corresponding federal income tax expense.
The Company recognized an after-tax decrease to income of $7.1 million
representing the minority ownership interest in the net income of Munich
American Reinsurance Company ("MARC") for the three months ended March 31, 1997,
prior to the Merger. There was no comparable amount for the quarter ended March
31, 1998.
The Company recognized an after-tax charge of $3.3 million for each of the
three-month periods ended March 31, 1998 and 1997, representing the Company's
minority interest in the earnings of American Re Capital, a single-purpose
wholly owned subsidiary trust. The charge is due to the distributions incurred
by American Re Capital on the Cumulative Quarterly Income Preferred Securities
("QUIPS").
Net income to common stockholders increased 57.3% to $82.9 million for the
quarter ended March 31, 1998, from $52.7 million for the same period in 1997.
FINANCIAL CONDITION
Total consolidated assets increased 2.2% to $13,579.3 million at March 31,
1998, from $13,288.8 million at December 31, 1997. This increase was primarily
due to an increase in premiums and other receivables of $159.8 million, and an
increase in reinsurance recoverables on paid and unpaid losses of $99.0 million.
The total financial statement value of investments and cash increased
slightly to $7,692.8 million at March 31, 1998, from $7,673.4 million at
December 31, 1997, primarily due to cashflows from operating activities,
somewhat offset by a decrease in the fair value of investments held. The
financial
-7-
<PAGE>
statement value of the investment portfolio at March 31, 1998, included a net
increase from amortized cost to fair value of $167.2 million for debt and equity
investments, compared to a net increase of $181.5 million at December 31, 1997.
At March 31, 1998, the Company recognized a cumulative unrealized gain of $108.7
million due to the net adjustment to fair value on debt and equity investments,
after applicable income tax effects, which was reflected in stockholders' equity
as a component of accumulated other comprehensive income. This represents a net
decrease to stockholders' equity of $9.3 million from the cumulative unrealized
gain on debt and equity securities of $118.0 million recognized at December 31,
1997.
Total consolidated liabilities increased 2.1% to $10,682.3 million at
March 31, 1998, from $10,464.9 million at December 31, 1997. This increase was
primarily due to increases in unearned premium reserves of $107.8 million, loss
and loss adjustment expense reserves of $51.2 million and loss balances payable
of $43.1 million.
Common stockholders' equity increased 2.8% to $2,659.5 million at March
31, 1998, from $2,586.4 million at December 31, 1997. This increase was
primarily attributable to net income of $82.9 million, offset by a $9.8 million
decrease in accumulated other comprehensive income, net of tax.
The Company's insurance/reinsurance subsidiaries' statutory surplus
increased to $2,406.6 million at March 31, 1998, from $2,323.4 million at
December 31, 1997. Operating leverage, as measured by such subsidiaries'
premiums-to-surplus ratio, on an annualized basis was 0.97 to 1 and 1.07 to 1 at
March 31, 1998, and December 31, 1997, respectively.
LIQUIDITY AND CAPITAL RESOURCES
The Company is an insurance holding company whose only material investment
is in the capital stock of American Re-Insurance. The Company is dependent on
dividends and tax allocation payments, primarily from American Re-Insurance, to
meet its short- and long-term liquidity requirements, including its debt service
obligations.
The Company's cash flow from operations may be influenced by a variety of
other factors, including cyclical changes in the property and casualty
reinsurance market, insurance regulatory initiatives, and changes in general
economic conditions. Liquidity requirements are met on a short- and long-term
basis by funds provided by operations and from the maturity and the sale of
investments. Cash provided by operations primarily consists of premiums
collected, investment income, and reinsurance recoverable balances collected,
less paid claims (including payments made to commute or settle reinsurance
arrangements), retrocession payments, underwriting and interest expenses, QUIPS
distributions, and income tax payments. Cash flows provided by operations for
the Company were $44.2 million for the three-month period ended March 31, 1998,
down from $126.9 million for the same period in 1997. This decrease was
primarily due to the timing of collections of premium balances due during the
three month period ended March 31, 1998, as compared to the same period in 1997.
Cash and cash equivalents were $368.3 million and $641.6 million at March
31, 1998, and December 31, 1997, respectively. Cash and short-term investments
are maintained for liquidity purposes and represented 4.8% and 8.4%,
respectively, of total financial statement investments and cash on such dates.
-8-
<PAGE>
PART II. OTHER INFORMATION
AMERICAN RE CORPORATION
Items 1 - 5 have been omitted as they are either inapplicable or the answer is
negative.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule is filed as part of this report.
-9-
<PAGE>
AMERICAN 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.
AMERICAN RE CORPORATION
(Registrant)
/S/ ROBERT K. BURGESS
-----------------------------------------
Robert K. Burgess
Duly Authorized Officer, Executive Vice
President,
General Counsel, and Secretary
/S/ GEORGE T. O'SHAUGHNESSY, JR.
-----------------------------------------
George T. O'Shaughnessy, Jr.
Executive Vice President and
Chief Financial and Accounting Officer
Dated: May 14, 1998
-10-
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM AMERICAN RE
CORPORATION'S REPORT ON FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<DEBT-HELD-FOR-SALE> 6,964
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 340
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 7,325
<CASH> 368
<RECOVER-REINSURE> 2,591
<DEFERRED-ACQUISITION> 386
<TOTAL-ASSETS> 13,579
<POLICY-LOSSES> 7,560
<UNEARNED-PREMIUMS> 1,407
<POLICY-OTHER> 261
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 574
238<F1>
0
<COMMON> 0
<OTHER-SE> 2,660
<TOTAL-LIABILITY-AND-EQUITY> 13,579
593
<INVESTMENT-INCOME> 111
<INVESTMENT-GAINS> 32
<OTHER-INCOME> 11
<BENEFITS> 395
<UNDERWRITING-AMORTIZATION> 194
<UNDERWRITING-OTHER> 34
<INCOME-PRETAX> 123
<INCOME-TAX> 37
<INCOME-CONTINUING> 86
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 83
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
<RESERVE-OPEN> 0
<PROVISION-CURRENT> 0
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 0
<PAYMENTS-PRIOR> 0
<RESERVE-CLOSE> 0
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>REPRESENTS COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF
SUBSIDIARY TRUST HOLDING AS ALL OF ITS ASSETS JUNIOR SUBORDINATED DEBENTURES.
</FN>
</TABLE>
