FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
(Mark One)
[X]QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 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: 1-11714
CITIZENS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 04-3178765
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
440 Lincoln Street, Worcester, Massachusetts 01653
(Address of principal executive offices)
(Zip Code)
(508) 855-1000
(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 [ ]
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court.
Yes [ ] No [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the registrant's classes
of common stock as of the latest practicable date: 35,728,400 Shares of
Common Stock Outstanding, as of May 1, 1996.
15
Total Number of Pages
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
<TABLE>
CITIZENS CORPORATION
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
(Unaudited)
Three Months Ended
(In millions, except per common share data) March 31,
<S> <C> <C>
1996 1995
Revenues
Net premiums written $ 215.9 $ 211.1
Increase in unearned premiums,
net of prepaid reinsurance premiums 11.4 16.1
Net premiums earned 204.5 195.0
Net investment income 19.6 20.6
Net realized gains (losses) on investments 14.7 (0.9)
Other income, net 0.5 0.6
Total revenues 239.3 215.3
Expenses
Losses and loss adjustment expenses 155.5 145.7
Policy acquisition and other
underwriting expenses 53.8 54.4
Policyholders' dividends 1.8 1.1
Total expenses 211.1 201.2
Income before federal income taxes 28.2 14.1
Federal income tax expense 5.7 2.5
Net income $ 22.5 $ 11.6
Per share data
Net income $ 0.63 $ 0.29
Dividends declared to shareholders $ 0.05 $ 0.05
Weighted average shares outstanding 35.8 36.1
The accompanying notes are an integral part of these financial statements
</TABLE>
<TABLE>
CITIZENS CORPORATION
CONSOLIDATED BALANCE SHEETS
<CAPTION>
(Unaudited)
(In millions, except per share data) March 31, December 31,
1996 1995
<S> <C> <C>
Assets
Investments:
Debt securities available-for-sale, at fair value
(amortized cost of $1,322.2 and $1,247.5) $ 1,340.7 $ 1,289.5
Equity securities available-for-sale, at fair value
(cost of $124.0 and $149.6) 163.0 189.5
Other investments, at fair value (cost of $9.2 and $9.6) 12.9 11.8
Total investments 1,516.6 1,490.8
Cash and cash equivalents 62.9 59.1
Accrued investment income 23.8 25.1
Premiums and notes receivable (less allowance for
doubtful accounts of $0.7 and $0.8) 152.4 141.0
Reinsurance recoverable on paid and unpaid losses 542.4 521.8
Prepaid reinsurance premiums 52.6 54.5
Deferred policy acquisition expenses 53.9 52.2
Deferred federal income taxes 34.5 29.7
Other assets 96.3 96.6
Total assets $ 2,535.4 $ 2,470.8
Liabilities and shareholders' equity
Liabilities:
Reserve for losses and loss adjustment expenses $ 1,309.9 $ 1,291.6
Unearned premiums 360.9 351.4
Other liabilities 178.2 145.0
Total liabilities 1,849.0 1,788.0
Shareholders' equity:
Common stock, $0.01 par value per share;
authorized 100.0 million shares;
36.1 million shares issued 0.4 0.4
Additional paid-in capital 156.1 156.1
Retained earnings 496.2 475.5
Unrealized appreciation on investments, net of
deferred federal income taxes 39.8 54.7
Treasury stock, at cost
(0.3 million shares and 0.2 million shares) (6.1) (3.9)
Total shareholders' equity 686.4 682.8
Total liabilities and shareholders' equity $ 2,535.4 $ 2,470.8
The accompanying notes are an integral part of these financial statements
</TABLE>
<TABLE>
CITIZENS CORPORATION
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<CAPTION>
(Unaudited)
Three Months Ended
(In millions) March 31,
1996 1995
<S> <C> <C>
Preferred stock
Balance at beginning and end of period $ - $ 100.0
Common stock
Balance at beginning and end of period 0.4 0.4
Additional paid-in capital
Balance at beginning and end of period 156.1 156.1
Retained earnings
Balance at beginning of period 475.5 409.8
Net income 22.5 11.6
Dividends declared to shareholders (1.8) (2.8)
Balance at end of period 496.2 418.6
Unrealized appreciation (depreciation) on investments, net
Balance at beginning of period 54.7 (20.4)
(Depreciation) appreciation during the period (22.9) 41.9
Benefit (provision) for deferred federal income taxes 8.0 (14.7)
Balance at end of period 39.8 6.8
Treasury stock
Balance at beginning of period (3.9) -
Shares purchased at cost (2.2) -
Balance at end of period (6.1) -
Total shareholders' equity $ 686.4 $ 681.9
The accompanying notes are an integral part of these financial statements
</TABLE>
<TABLE>
CITIZENS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
(Unaudited)
Three Months Ended
(In millions) March 31,
1996 1995
<S> <C> <C>
Cash was (used for) provided by
Operating Activities
Net income $ 22.5 $ 11.6
Adjustments to reconcile net income to net cash
provided by operating activities:
Net realized (gains) losses on investments (14.7) 0.9
Deferred federal income tax provision (benefit) 3.3 (0.4)
Change in assets and liabilities:
Deferred policy acquisition expenses (1.7) (2.6)
Premiums and notes receivable, net of reinsurance payable (8.8) (14.7)
Unearned premiums, net of prepaid reinsurance premiums 11.4 16.1
Reserve for losses and loss adjustment expenses,
net of reinsurance recoverable (2.3) 10.5
Other, net (8.4) (9.7)
Net cash provided by operating activities 1.3 11.7
Investing Activities
Proceeds from sale of available-for-sale debt securities 138.9 108.6
Proceeds from available-for-sale debt securities maturing or called 23.1 15.9
Proceeds from held-to-maturity debt securities maturing or called - 2.3
Proceeds from sale of available-for-sale equity securities
and other investments 57.9 9.3
Purchases of available-for-sale debt securities (237.6) (122.1)
Purchases of available-for-sale equity securities and other investments (17.8) (25.9)
Decrease (increase) in net receivable from securities transactions
not settled 42.5 (5.5)
Other investing activities, net (0.5) (0.9)
Net cash provided by (used for) investing activities 6.5 (18.3)
Financing Activities
Dividends paid to shareholders (1.8) (2.8)
Treasury stock purchased, at cost (2.2) -
Net cash used for financing activities (4.0) (2.8)
Net increase (decrease) in cash and cash equivalents 3.8 (9.4)
Cash and cash equivalents at beginning of period 59.1 141.4
Cash and cash equivalents at end of period $ 62.9 $ 132.0
The accompanying notes are an integral part of these financial statements
</TABLE>
CITIZENS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Earnings per Common Share
Actual earnings per common share for the quarters ended March 31, 1996 and
1995, are based upon weighted average common shares outstanding of 35.8
million and 36.1 million, respectively. Net income available to common
shareholders for the quarter ended March 31, 1995, was reduced by $1.0
million for dividends on preferred stock. On July 26, 1995, the Board of
Directors of Citizens Corporation (the Company) authorized the repurchase
of up to 0.5 million shares, or slightly more than one percent of its
outstanding common stock. On February 27, 1996, the Board of Directors
authorized the repurchase of an additional 0.3 million shares of common
stock, for a total authorization of 0.8 million shares or slightly more
than two percent of its outstanding common stock. During the first quarter
of 1996, the Company purchased 0.1 million shares for a total of 0.3
million shares since the implementation of the repurchase program.
MANAGEMENT'S REPRESENTATION
In the opinion of management, the financial statements reflect all
adjustments of a normal recurring nature necessary for a fair presentation
of the interim periods. Certain reclassifications have been made to the
1995 financial statements in order to conform to the 1996 presentation.
Interim results are not necessarily indicative of results expected for the
entire year. These financial statements should be read in conjunction with
the Company's 1995 Annual Report to Shareholders, as filed on Form 10-K to
the Securities and Exchange Commission.
<PAGE>
PARTI - FINANCIAL INFORMATION
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The results of operations for Citizens Corporation and subsidiaries (the
Company) include the accounts of Citizens Corporation (Citizens),
a non-insurance holding company, and its wholly-owned subsidiaries, Citizens
Insurance Company of America, Citizens Insurance Company of Ohio, and
Citizens Insurance Company of the Midwest (collectively Citizens
Operations), and Citizens Management Inc., which is wholly-owned by
Citizens Insurance Company of America.
Results of Operations
Net income
Net income for the quarter ended March 31, 1996, was $22.5 million, or
$0.63 per common share, compared to $11.6 million, or $0.29 per common
share, for the quarter ended March 31, 1995. Excluding realized gains and
losses, net of taxes, net income increased $0.7 million, to $12.9 million,
for the quarter ended March 31, 1996. The increase in net income is
primarily attributable to an increase of $15.6 million in net realized
gains on investments from a net realized loss of $0.9 million for the
quarter ended March 31, 1995 to a net realized gain of $14.7 million for
the quarter ended March 31, 1996. Net realized gains in 1996 reflect a
shift to a higher level of debt securities. Net income was also impacted
by a $4.8 million increase in catastrophe losses during the quarter.
There were no catastrophe losses in the comparable 1995 period. This was
offset by favorable claims experience on current and prior accident years,
primarily in the personal automobile line.
Revenues
Net premiums earned increased $9.5 million, or 4.9%, to $204.5 million, for
the quarter ended March 31, 1996, resulting from $5.8 million and $3.7
million increases in the Company's personal and commercial segments,
respectively. The increases are attributable primarily to price increases
in the automobile and homeowners lines. These items are partially offset
by price decreases in the workers' compensation line and continued
competitive conditions in all major lines.
Segment Results
Personal segment
Personal segment premiums represented 66.1% and 66.3% of total net premiums
earned for the quarters ended March 31, 1996, and 1995, respectively.
<TABLE>
<CAPTION>
For the Quarters Ended
March 31, (In millions) 1996 1995
<S> <C> <C>
Net premiums earned $ 135.1 $ 129.3
Losses and loss adjustment expenses 107.4 104.6
Policy acquisition expenses 27.2 26.0
Other underwriting expenses 9.2 10.3
Underwriting (loss) $ (8.7) $ (11.6)
</TABLE>
Personal segment net premiums earned increased $5.8 million, or 4.5%, to
$135.1 million for the quarter ended March 31, 1996 from $129.3 million for
the quarter ended March 31, 1995. This increase is primarily attributable
to price increases in the personal automobile and homeowners lines.
The personal segment underwriting loss was $8.7 million and $11.6 million
for the quarters ended March 31, 1996 and 1995, respectively. The
improvement in underwriting results reflects favorable claims experience
on current and prior accident years in the personal automobile line. This
improvement was partially offset by an increase in catastrophe losses of
$4.1 million in the homeowners line in 1996. Policy acquisition expenses
increased $1.2 million, or 4.6%, to $27.2 million, reflecting the growth
in net premiums earned. Other underwriting expenses decreased $1.1
million, or 10.7%, to $9.2 million, reduced technology expenses and
decreases in employee related expenses in 1996.
Commercial segment
Commercial segment premiums represented 33.9% and 33.7% of total net
premiums earned for the quarters ended March 31, 1996 and 1995,
respectively.
<TABLE>
<CAPTION>
For the Quarters Ended
March 31, (In millions) 1996 1995
<S> <C> <C>
Net premiums earned $ 69.4 $ 65.7
Losses and loss adjustment expenses 48.1 41.1
Policy acquisition expenses 13.6 12.8
Other underwriting expenses 3.8 5.3
Policyholders' dividends 1.8 1.1
Underwriting profit $ 2.1 $ 5.4
</TABLE>
Commercial segment net premiums earned increased $3.7 million, or 5.6%, to
$69.4 million for the quarter ended March 31, 1996 from $65.7 million for
the quarter ended March 31, 1995. This increase is primarily attributable
to increases in policies in force in all major lines except workers'
compensation, resulting from marketing programs developed with the
Company's agents which target growth in this segment, and to price
increases in the commericial automobile line. Increases in exposures per
policy in the commercial multiple peril and the workers' compensation lines
resulting from the strong Michigan economy also contributed to premium
growth. This was partially offset by rate decreases of 8.5% and 7.0%
effective May 1, and December 1, of 1995, respectively, in the workers'
compensation line. Continued competitive conditions may result in future
price decreases in the workers' compensation line.
The commercial segment underwriting profit was $2.1 million and $5.4
million for the quarters ended March 31, 1996 and 1995, respectively. The
decline in underwriting results for 1996 reflects increased claims activity
in the commercial multiple peril line. This was partially offset by growth
in net earned premiums. Policy acquisition expenses increased $0.8
million, or 6.3%, to $13.6 million, reflecting the growth in net premiums
earned. Other underwriting expenses decreased $1.5 million, or 28.3%, to
$3.8 million, reflecting reduced technology expenses and decreases in
employee related expenses in 1996.
Reserve for Losses and Loss Adjustment Expenses
The Company regularly updates its reserve estimates as new information
becomes available and further events occur which may impact the resolution
of unsettled claims. Changes in prior reserve estimates are reflected in
results of operations in the year such changes are determined to be needed
and recorded. The table below provides a reconciliation of the beginning
and ending reserve for unpaid losses and LAE as follows:
<TABLE>
<CAPTION>
For the three months ended March 31, (In millions) 1996 1995
<S> <C> <C>
Reserve for losses and LAE, beginning of period $ 1,291.6 $ 1,196.6
Incurred losses and LAE, net of reinsurance recoverable:
Provision for insured events of the current year 163.6 144.4
Decrease in provision for insured events of prior years (8.1) 1.3
Total incurred losses and LAE 155.5 145.7
Payments, net of reinsurance recoverable:
Losses and LAE attributable to insured events of current year 56.1 49.6
Losses and LAE attributable to insured events of prior years 95.0 85.6
Total payments 151.1 135.2
Change in reinsurance recoverable on unpaid losses 13.9 3.9
Reserve for losses and LAE, end of period $ 1,309.9 $ 1,211.0
</TABLE>
As part of an ongoing process, the reserves have been re-estimated for all
prior accident years and were decreased by $8.1 million, and increased by
$1.3 million, for the quarters ended March 31, 1996 and 1995, respectively.
The favorable reserve development in 1996 primarily reflects the
initiatives taken by the Company to manage medical costs in both automobile
lines and the workers' compensation line, as well as the impact of the
Michigan Supreme Court ruling on workers' compensation indemnity payments,
which decreases the maximum amount to be paid for indemnity cases on all
existing and future claims.
Investment Results
Net investment income before taxes was $19.6 million and $20.6 million for
the quarters ended March 31, 1996 and 1995, respectively. The investment
results reflect the average pre-tax yields of 5.3% in 1996 and 6.1% in
1995. These yields reflect the percentages of the portfolio of debt
securities invested in tax-exempt instruments, which were 72.8% and 71.3%
(64.3% and 64.0% of the total investment portfolio) at March 31, 1996 and
1995, respectively. The decrease primarily reflects lower trending
portfolio interest rates. Net investment income after taxes was $16.2
million and $17.2 million for the quarters ended March 31, 1996 and 1995,
respectively.
Investment Portfolio
The Company's investment portfolio increased $25.8 million, to $1,516.6
million during the quarter, from $1,490.8 million at December 31, 1995.
Debt securities increased $51.2 million, to $1,340.7 million, from $1,289.5
million, and represented 88.4% and 86.5% of the carrying value of all
investments at March 31, 1996 and December 31, 1995, respectively. This
increase is consistent with the Company's strategy of increasing the level
of debt securities in the portfolio. This was accomplished by reducing the
level of equities in the portfolio, which resulted in a $26.5 million
decrease in equity securities to $163.0 million in the first quarter of
1996. Tax-exempt securities increased $57.5 million, to $975.8 million,
from $918.3 million during the quarter. Tax-exempt securities represented
72.8% of total debt securities at March 31, 1996 compared to 71.2% at
December 31, 1995. This increase reflects the Company's efforts to
maximize after-tax investment income.
Net unrealized appreciation in the investment portfolio at March 31, 1996
was $61.1 million compared to $84.0 million at December 31, 1995.
Unrealized depreciation in the quarter was $23.4 million for bonds, and
unrealized appreciation on equity securities and other investments was $0.5
million.
Liquidity and Capital Resources
Liquidity describes the ability of a company to generate sufficient cash
flows to meet the cash requirements of business operations. As a holding
company, Citizens' primary source of cash for payment of dividends to its
shareholders is dividends from its insurance subsidiaries, which are
subject to limitations imposed by state regulators. Such limitations
require that dividends be paid only out of statutory earned surplus
(unassigned funds) and a restriction on the payment of "extraordinary"
dividends without prior approval of the state authorities.
Underwriting and investing, typically the two distinct, but not separate
operations in an insurance company, are the sources of cash for Citizens
Insurance. The primary sources of cash are premiums collected, investment
income and maturing investments. Primary cash outflows are paid losses and
LAE, policy acquisition expenses, other underwriting expenses, and
purchases of investments. Cash outflows related to claim losses and LAE
can be variable because of uncertainties surrounding settlement dates for
unpaid losses and the potential for large losses either individually or in
the aggregate. Accordingly, the Company's strategy is to monitor available
cash and short-term investment balances in relation to projected cash needs
by matching the maturities of its investments to expected payments of
current and long-term liabilities.
Net cash provided by operating activities, for the quarter ended March 31,
1996, was $1.3 million compared to $11.7 million in the prior year period.
The decrease in cash provided by operating activities in 1996 reflects an
increase in losses and LAE paid, net of reinsurance recovered, of $25.9
million, partially offset by an increase in premiums received, net of
reinsurance paid, of $10.8 million.
Net cash provided by investing activities for the Company was $6.5 million
for the first quarter of 1996 compared to net cash used by investing
activities of $18.3 million for the first quarter of 1995. This increase
in net cash provided by investing activities was attributable to the
increase in sales of equity securities resulting from the shift to a higher
level of debt securities.
Net cash used for financing activities for the Company was $4.0 million and
$2.8 million, for the first quarters of 1996 and 1995, respectively. This
increase in net cash used for financing activities was attributable to the
repurchase of treasury stock and partially offset by the reduction in
dividends paid on the Series A Preferred Stock, which was redeemed on June
30, 1995.
Shareholders' equity was $686.4 million at March 31, 1996, or $19.20 per
common share, compared to $682.8 million at December 31, 1995, or $19.04
per common share. The increase in shareholders' equity is primarily due
to the impact of net income of $22.5 million for the quarter ended March
31, 1996, partially offset by a decrease of $14.9 million in the fair
values of available-for-sale debt and equity securities, net of the benefit
from deferred income taxes. Changes in shareholders' equity related to the
unrealized values of underlying portfolio investments will continue to be
volatile as market prices of debt securities fluctuate with changes in the
interest rate environment.
The Company expects to continue to pay dividends in the foreseeable future.
However, payment of future dividends is subject to the Board of Directors'
approval and is dependent, among other things, upon earnings and the
financial condition of the Company.
Based on current trends, the Company expects to continue to generate
sufficient positive operating cash to meet all short-term and long-term
cash requirements. The Company maintains a high degree of liquidity within
the investment portfolio in fixed maturity investments, common stock and
short-term investments.
Recent Developments
In March 1996, two recently enacted tort reform statutes became effective
in Michigan, one which limits the recovery for tort liability for bodily
injury by restricting the situations which qualify for serious bodily
impairment and requiring the determination to be made by a judge instead
of a jury and the other which provides for a comparative negligence system
as opposed to joint and several liability. Both statutes prohibit recovery
in certain circumstances in which the party was more than 50% at fault.
The Company believes that the new statutes will improve future loss
experience in the personal and commercial segments. However, the benefits
of the tort reform laws may be offset over time by price decreases in these
lines. As a result, the Company believes that the new laws will not have
a material effect on its results of operations or financial condition.
In February 1996, an amendment to the Essential Insurance Act became
effective in Michigan. This amendment eliminates personal automobile and
homeowners insurance territorial rating restrictions and limits merit
ratings for automobile policies. The Company cannot predict the effect of
this new legislation, but believes this law may result in additional
competition in the personal segment.
The Company expects second quarter results to be impacted by catastrophe
losses related to its property and casualty insurance operations in
Michigan and Indiana. The Company expects to incur an estimated $14
million in pre-tax catastrophe losses, net of reinsurance, resulting from
tornadoes and wind storms that struck the two states in April. The Company
believes the after-tax impact on second quarter net income will be less
than $10 million.
PART II - OTHER INFORMATION
ITEM 6
Exhibits and Reports on Form 8-K
(a) Exhibits
EX-11 Statement regarding computation of per
share earnings.
EX-27 Financial Data Schedule
(b) Reports on Form 8-K
On February 27, 1996, a report on Form 8-K was filed
reporting under Item 5, Other Events, the
Registrant's announcement that its Board of Directors
had authorized the repurchase of an additional
300,000 shares of common stock. The Board in July of
1995 had authorized the repurchase of up to 500,000
shares of the Company's common stock.
On May 2, 1996, a report on Form 8-K was filed
reporting under Item 5, Other Events, the Registrant's
announcement that second quarter results will be impacted
by an estimated $14.0 million in catastrophe losses.
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.
CITIZENS CORPORATION
Registrant
Dated May 10, 1996 /s/ John F. O'Brien
John F. O'Brien
President and Chief Executive Officer
Dated May 10, 1996 /s/ James R. McAuliffe
James R. McAuliffe
Vice President
Dated May 10, 1996 /s/ Eric A. Simonsen
Eric A. Simonsen
Vice President, Chief Financial Officer,
and Principal Accounting Officer
<TABLE>
EXHIBIT 11
CITIZENS CORPORATION AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER COMMON SHARE EARNINGS
For the Periods Ended March 31, 1996 and 1995
<CAPTION>
(In millions, except per common share data)
Quarter Ended
March 31,
1996 1995
<S> <C> <C>
Primary Net Income Per Common Share
Net income . . . . . . . . . . . . . . . . . . . . . . . . . 22.5 11.6
Preferred dividend . . . . . . . . . . . . . . . . . . . . . . - 1.0
Net income available to common shareholders . . . . . . . . 22.5 10.6
Net income per share available to common shareholders . . . 0.63 0.29
Average shares outstanding. . . . . . . . . . . . . . . . . . . . 35.8 36.1
Net shares to be issued upon exercise of dilutive
stock options after applying the treasury stock . . - -
Adjusted shares outstanding . . . . . . . . . . . . . . . . . . . 35.8 36.1
Fully Diluted Net Income Per Common Share
Net income . . . . . . . . . . . . . . . . . . . . . . . . . 22.5 11.6
Preferred dividend . . . . . . . . . . . . . . . . . . . . . . - 1.0
Net income available to common shareholders . . . . . . . . 22.5 10.6
Net income per share available to common shareholders . . . 0.63 0.29
Average shares outstanding. . . . . . . . . . . . . . . . . . . . 35.8 36.1
Net shares to be issued upon exercise of dilutive
stock options after applying the treasury stock . . - -
Adjusted shares outstanding . . . . . . . . . . . . . . . . . . . 35.8 36.1
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<DEBT-HELD-FOR-SALE> 1341
<DEBT-CARRYING-VALUE> 1322
<DEBT-MARKET-VALUE> 1341
<EQUITIES> 163
<MORTGAGE> 0
<REAL-ESTATE> 4
<TOTAL-INVEST> 1517
<CASH> 63
<RECOVER-REINSURE> 10
<DEFERRED-ACQUISITION> 54
<TOTAL-ASSETS> 2535
<POLICY-LOSSES> 1310
<UNEARNED-PREMIUMS> 361
<POLICY-OTHER> 3
<POLICY-HOLDER-FUNDS> 7
<NOTES-PAYABLE> 0
0
0
<COMMON> 0
<OTHER-SE> 686
<TOTAL-LIABILITY-AND-EQUITY> 2535
205
<INVESTMENT-INCOME> 20
<INVESTMENT-GAINS> 15
<OTHER-INCOME> 1
<BENEFITS> 156
<UNDERWRITING-AMORTIZATION> 41
<UNDERWRITING-OTHER> 15
<INCOME-PRETAX> 29
<INCOME-TAX> 6
<INCOME-CONTINUING> 23
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 23
<EPS-PRIMARY> 0.63
<EPS-DILUTED> 0.63
<RESERVE-OPEN> 1292
<PROVISION-CURRENT> 164
<PROVISION-PRIOR> (8)
<PAYMENTS-CURRENT> 56
<PAYMENTS-PRIOR> 95
<RESERVE-CLOSE> 1310
<CUMULATIVE-DEFICIENCY> (13)
</TABLE>
