<PAGE> 1
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 March 31, 1996
COMMISSION FILE NUMBER 0-22280
PHILADELPHIA CONSOLIDATED HOLDING CORP.
---------------------------------------
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-2202671
------------ ----------
(State of Incorporation) Identification No.)
ONE BALA PLAZA, SUITE 100
BALA CYNWYD, PENNSYLVANIA 19004
(610) 617-7900
-----------------------------
(Address, including zip code and telephone number,
including area code, of registrant's principal executive offices)
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 May 10, 1996.
Preferred Stock, $.01 par value, no shares outstanding
Common Stock, no par value, 5,813,851 shares outstanding
1
<PAGE> 2
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
INDEX
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
<TABLE>
<S> <C>
Part I - Financial Information
Consolidated Balance Sheets - March 31, 1996 and
December 31, 1995 3
Consolidated Statements of Operations - For the three
months ended March 31, 1996 and 1995 4
Consolidated Statements of Changes in Shareholders' Equity - For
the three months ended March 31, 1996 and year ended
December 31, 1995 5
Consolidated Statements of Cash Flows - For the three
months ended March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Results of Operations and
Financial Condition 8-9
Part II - Other Information 10
Signatures 11
Exhibits 12
</TABLE>
2
<PAGE> 3
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
As of
----------------------------
March 31, December 31,
1996 1995
--------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
INVESTMENTS:
FIXED MATURITIES AVAILABLE FOR SALE AT MARKET
(AMORTIZED COST $125,424 AND $117,740)
(including $30,281 and $30,648 in Trust Accounts).... $127,938 $121,848
EQUITY SECURITIES AT MARKET (COST $9,912 AND $9,685)
(including $102 and $118 in Trust Accounts).......... 13,572 12,558
-------- --------
TOTAL INVESTMENTS................................... 141,510 134,406
CASH AND CASH EQUIVALENTS (including $3,000 and $3,048
in Trust Accouts)..................................... 2,687 5,680
ACCRUED INVESTMENT INCOME.............................. 2,024 2,172
PREMIUMS RECEIVABLE.................................... 8,113 7,898
PREPAID REINSURANCE PREMIUMS AND
REINSURANCE RECEIVABLES............................... 14,190 12,785
DEFERRED ACQUISITION COSTS............................. 5,900 5,157
PROPERTY AND EQUIPMENT................................. 4,390 3,868
GOODWILL-LESS ACCUMULATED AMORTIZATION OF
$1,137 AND $1,120..................................... 947 964
DEFERRED INCOME TAXES.................................. 329 4
OTHER ASSETS........................................... 1,836 1,214
-------- --------
TOTAL ASSETS........................................ $181,926 $174,148
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
POLICY LIABILITIES AND ACCRUALS:
UNPAID LOSS AND LOSS ADJUSTMENT EXPENSES.............. $ 81,736 $ 77,686
UNEARNED PREMIUMS..................................... 20,136 18,119
-------- --------
TOTAL POLICY LIABILITIES AND ACCRUALS............... 101,872 95,805
PREMIUMS PAYABLE....................................... 2,070 2,445
PAYABLE FOR INVESTMENT PURCHASES....................... - 1,017
OTHER LIABILITIES...................................... 6,149 6,051
INCOME TAXES PAYABLE................................... 1,336 514
-------- --------
TOTAL LIABILITIES................................... 111,427 105,832
-------- --------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
PREFERRED STOCK, $.01 PAR VALUE,
10,000,000 SHARES AUTHORIZED,
NONE ISSUED AND OUTSTANDING.......................... - -
COMMON STOCK, NO PAR VALUE, 50,000,000 SHARES
AUTHORIZED, 5,813,851 SHARES ISSUED AND
OUTSTANDING.......................................... 39,057 39,057
UNREALIZED INVESTMENT APPRECIATION (DEPRECIATION),
NET OF DEFERRED INCOME TAXES........................ 4,076 4,608
RETAINED EARNINGS..................................... 27,366 24,651
-------- --------
TOTAL SHAREHOLDERS' EQUITY.......................... 70,499 68,316
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY.......... $181,926 $174,148
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
3
<PAGE> 4
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------
1996 1995
---- ----
<S> <C> <C>
REVENUE:
GROSS EARNED PREMIUMS............................ $ 25,438 $ 21,376
CEDED EARNED PREMIUMS............................ (9,621) (8,170)
-------- --------
NET EARNED PREMIUMS.............................. 15,817 13,206
NET INVESTMENT INCOME............................ 1,846 1,414
NET REALIZED INVESTMENT LOSS..................... (27) -
OTHER INCOME..................................... 48 86
-------- --------
TOTAL REVENUE................................ 17,684 14,706
-------- --------
LOSSES AND EXPENSES:
LOSS AND LOSS ADJUSTMENT EXPENSES................ 9,979 10,006
NET REINSURANCE RECOVERIES....................... (1,305) (2,610)
-------- --------
NET LOSS AND LOSS ADJUSTMENT EXPENSES............ 8,674 7,396
ACQUISITION COSTS AND OTHER UNDERWRITING
EXPENSES........................................ 5,107 4,012
OTHER OPERATING EXPENSES......................... 400 615
-------- --------
TOTAL LOSSES AND EXPENSES.................... 14,181 12,023
-------- --------
INCOME BEFORE INCOME TAXES........................ 3,503 2,683
-------- --------
INCOME TAX EXPENSE (BENEFIT):
CURRENT.......................................... 839 639
DEFERRED......................................... (51) (102)
-------- --------
TOTAL INCOME TAX EXPENSE..................... 788 537
-------- --------
NET INCOME........................................ $ 2,715 $ 2,146
======== ========
PER AVERAGE COMMON SHARE DATA:
NET INCOME...................................... $ 0.39 $ 0.32
======== ========
WEIGHTED AVERAGE SHARES AND SHARE EQUIVALENTS
USED IN COMPUTATION OF NET INCOME PER
COMMON SHARE.................................... 7,000,213 6,707,321
========= =========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
4
<PAGE> 5
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
For the Three Months For the Year Ended
Ended March 31, December 31,
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
COMMON SHARES:
BALANCE AT BEGINNING OF PERIOD..................... 5,813,851 5,813,851
========== ==========
BALANCE AT END OF PERIOD........................... 5,813,851 5,813,851
========== ==========
COMMON STOCK:
BALANCE AT BEGINNING OF PERIOD..................... $39,057 $39,096
ISSUANCE OF SHARES
OTHER............................................ - (39)
---------- -----------
BALANCE AT END OF PERIOD........................... 39,057 39,057
---------- -----------
UNREALIZED INVESTMENT APPRECIATION (DEPRECIATION)
NET OF DEFERRED INCOME TAXES:
BALANCE AT BEGINNING OF PERIOD..................... 4,608 (1,317)
CHANGE IN UNREALIZED INVESTMENT APPRECIATION
(DEPRECIATION), NET OF DEFERRED INCOME TAXES..... (532) 5,925
---------- -----------
BALANCE AT END OF PERIOD........................... 4,076 4,608
---------- -----------
RETAINED EARNINGS:
BALANCE AT BEGINNING OF PERIOD..................... 24,651 14,821
NET INCOME......................................... 2,715 9,830
---------- -----------
BALANCE AT END OF PERIOD........................... 27,366 24,651
---------- -----------
TOTAL SHAREHOLDERS' EQUITY................... $ 70,499 $ 68,316
========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
5
<PAGE> 6
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(Unaudited)
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
-------------------------------------
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME......................................... $ 2,715 $ 2,146
ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH
PROVIDED BY OPERATING ACTIVITIES:
CHANGE IN PREMIUMS RECEIVABLE..................... (215) (670)
CHANGE IN OTHER RECEIVABLES AND PREPAIDS.......... (1,257) (2,678)
CHANGE IN DEFERRED ACQUISITION COSTS.............. (743) (385)
CHANGE IN OTHER ASSETS............................ (622) (353)
CHANGE IN UNPAID LOSS AND LOSS ADJUSTMENT
EXPENSES........................................ 4,050 6,336
CHANGE IN UNEARNED PREMIUMS....................... 2,017 1,304
CHANGE IN PREMIUMS PAYABLE AND OTHER LIABILITIES.. (277) (2,093)
CHANGE IN INCOME TAXES PAYABLE.................... 822 612
NET REALIZED INVESTMENT LOSS...................... 27 -
DEPRECIATION AND AMORTIZATION EXPENSE............. 222 289
DEFERRED INCOME TAX BENEFIT....................... (51) (102)
-------- --------
NET CASH PROVIDED BY OPERATING ACTIVITIES....... 6,688 4,406
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
PROCEEDS FROM SALES OF INVESTMENTS IN FIXED MATURITY
SECURITIES AVAILABLE FOR SALE.................... - 5,284
PROCEEDS FROM MATURITY OF INVESTMENTS IN FIXED
MATURITY SECURITIES AVAILABLE FOR SALE........... 5,921 218
PROCEEDS FROM MATURITY OF INVESTMENTS IN FIXED
MATURITY SECURITIES HELD TO MATURITY............. - 1,231
PROCEEDS FROM SALES OF INVESTMENTS IN EQUITY
SECURITIES....................................... 746 442
COST OF FIXED MATURITY SECURITIES AVAILABLE FOR SALE
ACQUIRED......................................... (14,141) (17,678)
COST OF FIXED MATURITY SECURITIES HELD TO
MATURITY ACQUIRED............................... - (301)
COST OF EQUITY SECURITIES ACQUIRED................ (1,533) (672)
OTHER - NET....................................... - (3,000)
PURCHASE OF PROPERTY AND EQUIPMENT................ (674) (114)
-------- --------
NET CASH USED BY INVESTING ACTIVITIES........... (9,681) (14,590)
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS.......... (2,993) (10,184)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD... 5,680 16,464
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD......... $ 2,687 $ 6,280
======== ========
CASH PAID DURING THE PERIOD FOR:
INCOME TAXES $ - $ -
</TABLE>
The accompanying notes are an integral part of the consolidated
financial statements.
6
<PAGE> 7
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation
The consolidated financial statements as of and for the three months
ended March 31, 1996 and 1995 are unaudited, but in the opinion of
management, have been prepared on the same basis as the annual audited
consolidated financial statements and reflect all adjustments,
consisting of normal recurring accruals, necessary for a fair
presentation of the information set forth therein. The results of
operations for the three months ended March 31, 1996 are not
necessarily indicative of the operating results to be expected for the
full year or any other period. Certain prior year amounts have been
reclassified for comparative purposes.
These financial statements should be read in conjunction with the
financial statements and notes as of and for the year ended December
31, 1995 included in the Company's Annual Report on Form 10-K.
2. Investments
During 1995 implementation guidance for SFAS No. 115 was adopted.
Upon adoption, the appropriateness of the classifications for all
securities held was reassessed. This reassessment resulted in
reclassifying all securities in the Held to Maturity category to the
Available for Sale category. The aggregate market value, amortized
cost and unrealized loss on these securities was $25,601,000,
$24,690,000, and $243,000, respectively. The reclassification from
this one-time reassessment pursuant to the initial adoption of the
implementation guidance does not call into question the intent to
potentially hold other debt securities to maturity in the future.
3. Earnings Per Share
Earnings per common share has been calculated by dividing net income
for the period by the weighted average number of common shares and
common share equivalents outstanding during the period.
4. Income Taxes
The effective tax rate differs from the 34% marginal tax rate
principally as a result of interest exempt from tax, the dividend
received deduction and other differences in the recognition of
revenues and expenses for tax and financial reporting purposes.
7
<PAGE> 8
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
GENERAL
Although the Company's financial performance is dependent upon its own specific
business characteristics, certain risk factors can affect the profitability of
the Company. These include:
- Industry factors - Historically the financial performance of the
commercial property and casualty insurance industry has tended to
fluctuate in cyclical patterns of soft markets followed by hard
markets. In the current environment, insurance industry pricing in
general continues to be soft, however the Company's strategy is to
focus on underwriting profits and accordingly the Company's marketing
organization is being directed into those niche businesses that
exhibit the greatest potential for underwriting profits.
- Competition - The Company competes in the commercial property and
casualty business with other domestic and international insurers
having greater financial and other resources than the Company.
- Regulation - The Company's insurance subsidiaries are subject to a
substantial degree of regulatory oversight, which generally is
designed to protect the interests of policyholders, as opposed to
shareholders.
- Inflation - Commercial property and casualty insurance premiums are
established before the amount of losses and loss adjustment expenses,
or the extent to which inflation may effect such amounts is known.
- Investment Risk - Substantial future increases in interest rates could
result in a decline in the market value of the Company's investment
portfolio and resulting losses and/or reduction in shareholders'
equity.
RESULTS OF OPERATIONS (THREE MONTHS ENDED MARCH 31, 1996 VS MARCH 31, 1995)
Premiums: Gross written premiums grew $4.9 million (21.7%) to $27.5
million for the three months ended March 31, 1996 from $22.6 million for the
same period of 1995; gross earned premiums grew $4.0 million (18.7%) to $25.4
million for the three months ended March 31, 1996 from $21.4 million for the
same period of 1995; net written premiums increased $3.2 million (22.4%) to
$17.5 million for the three months ended March 31, 1996 from $14.3 million for
the same period of 1995; and net premiums earned grew $2.6 million (19.7%) to
$15.8 million in 1996 from $13.2 million in 1995. The overall growth in
premiums and the varying growth rates for gross written premiums, gross earned
premiums, net written premiums and net earned premiums are attributable to a
number of factors:
- - - Overall premium growth is primarily attributable to: the growth in the
field production underwriting organization enabling the expansion of
the Company's marketing efforts to non-profit organizations, the
health and fitness industry and selected professional liability
products; and continued favorable market conditions for certain
leasing products.
- - - Overall premium growth has been offset in part by a continued decrease
in premiums from certain rental products due primarily to inadequate
pricing levels which are currently being experienced as a result of
market competition. Consistent with the Company's conservative
underwriting and pricing guidelines the underwriting of these rental
products has been curtailed. The Company does not anticipate an
improvement in these market conditions in the foreseeable future.
8
<PAGE> 9
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL
CONDITION
(continued)
Net Investment Income: Net investment income approximated $1.8
million for the three months ended March 31, 1996 and $1.4 million for the same
period of 1995. Total investments grew to $141.5 million at March 31, 1996
from $108.0 million at March 31, 1995, primarily due to cash flows provided
from operating activities.
Net Loss and Loss Adjustment Expenses: Net loss and loss adjustment
expenses increased $1.3 million (17.6%) to $8.7 million in the first quarter of
1996 from $7.4 million in the first quarter of 1995 and the Company's statutory
loss ratio decreased to 54.8% in 1996 from 56.0% in 1995. The increase in net
loss and loss adjustment expenses was due primarily to the 19.7% growth in net
earned premiums. Additionally, since there was relatively higher net earned
premium growth on products with low loss experience, the percentage increase in
net loss and loss adjustment expenses (17.6%) was lower than the 19.7% net
earned premium growth.
Acquisition Costs and Other Underwriting Expenses: Acquisition costs
and other underwriting expenses increased $1.1 million (27.5 %), to $5.1
million for the three months ended March 31, 1996 from $4.0 million for the
same period of 1995. This increase was due primarily to the 19.7% growth in
net earned premiums and in part due to increased commission expense as a result
of the Company beginning to market its niche underwriting to preferred and
program brokers.
Other Operating Expenses: Other operating expenses decreased $215,000
(35.0%), to $400,000 for the three months ended March 31, 1996 compared to
$615,000 for the same period of 1995 principally due to a greater portion of
expenses being attributable to acquisition costs and other underwriting
expenses.
Income Tax Expense: The Company's effective tax rates for the three
months ended March 31, 1996 and 1995 were 22.5% and 20.0%, respectively. The
effective rates differed from the 34% statutory rate principally due to
investments in tax-exempt securities.
LIQUIDITY AND CAPITAL RESOURCES
For the three months ended March 31, 1996 the Company's investments
classified as available for sale experienced unrealized investment depreciation
of $.5 million, net of the related deferred tax benefit of $.3 million. The
change in unrealized appreciation is primarily due to changes in market
interest rates during the period. At March 31, 1996, 100% of the Company's
fixed maturity securities consisted of U.S. Government securities or securities
rated "1" or "2" by the NAIC, 95.8% were rated "A-" or better (with no security
rated lower than "BBB-") by Standard & Poor's Corporation.
The Company produced net cash from operations of $6.7 million and $4.4
million, respectively, for the three months ended March 31, 1996 and 1995.
Management believes that the Company has adequate ability to pay all claims and
meet all other cash needs.
Risk-based capital is designed to measure the acceptable amount of
capital an insurer should have based on the inherent specific risks of each
insurer. Insurers failing to meet this benchmark capital level may be subject
to scrutiny by the insurer's domicilary insurance department and ultimately
rehabilitation or liquidation. Based on the standards currently adopted, the
Company's insurance subsidiaries' capital and surplus is in excess of the
prescribed risk-based capital requirements.
9
<PAGE> 10
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities
None.
Item 3. Defaults Upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other information.
None
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
--------
Exhibit No. Page No. Description
----------- -------- -----------
11.0 12 Computation of Earnings Per
Share.
27 Financial Data Schedule
b. The Company has not filed any reports on Form 8-K during the
quarter for which this report is filed.
10
<PAGE> 11
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.
PHILADELPHIA CONSOLIDATED HOLDING CORP.
---------------------------------------
Registrant
Date May 10, 1996 /s/ James J. Maguire
------------ ------------------------------------------
James J. Maguire
Chairman of the Board of Directors
and Chief Executive Officer
(Principal Executive Officer)
Date May 10, 1996 /s/ Craig P. Keller
------------ ------------------------------------------
Craig P. Keller
Vice President, Chief Financial Officer
and Secretary (Principal Financial and
Accounting Officer)
11
<PAGE> 1
PHILADELPHIA CONSOLIDATED HOLDING CORP. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(Dollars and Share Data in Thousands, except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
As of and For the Three Months Ended March 31,
----------------------------------------------
1996 1995
---- ----
<S> <C> <C>
Weighted Average Shares Outstanding 5,814 5,814
Weighted Average Stock Options Outstanding 1,877 1,592
Assumed Shares Repurchased (691) (699)
----- -----
Weighted Average Shares and Share
Equivalents Outstanding 7,000 6,707
===== =====
Net Income $2,715 $2,146
====== ======
Net Income Per Share $0.39 $0.32
===== =====
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 7
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<DEBT-HELD-FOR-SALE> 127,938
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 13,572
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 141,510
<CASH> 2,687
<RECOVER-REINSURE> 1,063
<DEFERRED-ACQUISITION> 5,900
<TOTAL-ASSETS> 181,926
<POLICY-LOSSES> 81,736
<UNEARNED-PREMIUMS> 20,136
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 39,057
<OTHER-SE> 31,442
<TOTAL-LIABILITY-AND-EQUITY> 181,926
15,817
<INVESTMENT-INCOME> 1,846
<INVESTMENT-GAINS> (27)
<OTHER-INCOME> 48
<BENEFITS> 8,674
<UNDERWRITING-AMORTIZATION> 5,107
<UNDERWRITING-OTHER> 400
<INCOME-PRETAX> 3,503
<INCOME-TAX> 788
<INCOME-CONTINUING> 2,715
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,715
<EPS-PRIMARY> .39
<EPS-DILUTED> .39
<RESERVE-OPEN> 68,246<F1>
<PROVISION-CURRENT> 8,674
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 4,318
<PAYMENTS-PRIOR> 917
<RESERVE-CLOSE> 71,685<F1>
<CUMULATIVE-DEFICIENCY> 0
<FN>
<F1>Unpaid loss and loss adjustment expenses differ from the
amounts reported in the Consolidated Financial Statements
because of the inclusion herein of reinsurance receivables
of $10,051 and $9,440 at March 31, 1996 and December 31, 1995,
respectively.
</FN>
</TABLE>
