<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-----------------------
FORM 10-QSB
(Mark One)
X QUARTERLY REPORT UNDER SECTION 13 0R 15 (d) OF THE SECURITIES EXCHANGE ACT
- -----
OF 1934
For the quarterly period ended March 31, 1997
____ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from __________to __________.
Commission file number 0-24638
-------
MOUNTBATTEN, INC.
-----------------
(Exact name of small business issuer as specified in its charter)
Pennsylvania 23-2633708
- --------------------------------- ----------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
33 Rock Hill Road
Bala Cynwyd, Pennsylvania 19004
- --------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(610) 664-2259
--------------
(Issuer's telephone number)
n/a
--------------------------
(Former name, former address, and former fiscal year if changed
since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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 CORPORATE ISSUERS:
State the number of shares outstanding of each of the issuer's classes
of common equity as of the latest practicable date:
Class Outstanding at May 9, 1997
------------------------------------- --------------------------
Common Stock 2,528,530
Par value $.001 per share
Transitional Small Business Disclosure Format (check one) YES NO X
--- ---
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
Mountbatten, Inc. and Subsidiaries
Consolidated Balance Sheets
<TABLE>
<CAPTION>
As of As of
March 31, December 31,
ASSETS 1997 1996
---- ----
(unaudited)
<S> <C> <C>
Fixed maturities
Available for sale, at fair value (amortized cost
of $7,695,049 and $8,596,475, respectively) $7,499,645 $8,487,946
Cash and cash equivalents 436,588 759,749
Premiums receivable 753,786 562,820
Reinsurance receivable 274,019 294,911
Subrogation receivable 577,420 606,476
Accrued investment income 152,782 60,196
Property and equipment, net 80,741 56,838
Deferred acquisition costs 459,866 393,447
Prepaid reinsurance premiums 484,808
Deferred tax asset 55,039 32,223
Other assets 191,652 4,215
----------- -----------
TOTAL ASSETS $10,966,346 $11,258,821
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Unpaid claims and claim adjustment expenses $947,952 $1,153,270
Unearned premiums 1,057,639 954,101
Reinsurance premium payable 353,834
Accrued expenses and other liabilities 162,405 254,927
Federal income taxes payable 149,532 161,505
----------- -----------
TOTAL LIABILITIES 2,317,528 2,877,637
----------- -----------
Shareholders' Equity
Common stock, par value $.001 per share;
Authorized 20,000,000 shares; issued and
and outstanding, 2,528,530 shares. 2,529 2,529
Additional paid in capital 6,762,934 6,762,934
Net unrealized depreciation, fixed (128,967) (71,629)
maturities
Retained earnings 2,012,322 1,687,350
----------- -----------
TOTAL SHAREHOLDERS' EQUITY 8,648,818 8,381,184
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY $10,966,346 $11,258,821
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
2
<PAGE>
Mountbatten, Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
Three months ended
March 31,
1997 1996
---- ----
Underwriting:
Gross written premiums $1,758,600 $1,615,039
Premiums ceded (279,266) (276,582)
---------- ----------
Net written premiums 1,479,334 1,338,457
Change in unearned premium (103,538) (93,859)
---------- ----------
Net earned premiums 1,375,796 1,244,598
---------- ----------
Claims and claims adjustment expenses (32,755) 87,121
Commission expense 481,828 496,369
Salaries and benefits 334,907 224,698
Professional fees 29,279 29,125
Other operating expenses 188,759 154,954
---------- ----------
1,002,018 992,267
---------- ----------
Underwriting income 373,778 252,331
Interest income 118,605 99,610
---------- ----------
Income before income taxes 492,383 351,941
Provision for income taxes 167,411 103,823
---------- ----------
Net income $ 324,972 $ 248,118
========== ==========
Primary earnings per share: $0.12 $0.10
Weighted average shares outstanding 2,777,103 2,603,605
The accompanying notes are an integral part of these financial statements
3
<PAGE>
Mountbatten, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
1997 1996
---- ----
<S> <C> <C>
Operating activities:
Net income $324,972 $248,118
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization 8,538 4,191
Change in:
Premiums receivable (190,966) (376,931)
Reinsurance receivable -
20,892
Subrogation recoverable 29,056 (57,691)
Accrued investment income (92,586) (97,585)
Unearned premiums 103,538 93,859
Unpaid claims and claim adjustment
Expenses (205,318) 68,652
Prepaid reinsurance premiums (838,642) 25,332
Accrued expenses and other liabilities (92,279) 232,323
Deferred acquisition costs (66,419) (41,298)
Deferred tax asset (22,816) (29,685)
Federal income taxes payable (11,973) (156,977)
Other, net (158,142) (32,106)
---------- ---------
Net cash provided by (used in) operating activities (1,192,145) (119,798)
---------- ---------
Investing activities:
Purchase of equipment (32,442) (6,500)
Purchase of investments (238,063) (289,535)
Maturities of investments 1,139,489 38,907
---------- ---------
Net cash provided by (used in) investing activities 868,984 (257,128)
---------- ---------
Net increase (decrease) in cash and cash equivalents (323,161) (376,926)
Cash and cash equivalents at beginning of period 759,749 755,639
---------- ---------
Cash and cash equivalents at end of period $436,588 $378,713
========== =========
</TABLE>
Supplemental disclosure of cash flow information:
The Company made payments of $175,000 and $260,800 during the three months ended
March 31, 1997 and 1996 for federal income taxes, respectively.
The accompanying notes are an integral part of these financial statements
4
<PAGE>
Mountbatten, Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(unaudited)
Note 1 - Description of Business:
Mountbatten, Inc. ("Mountbatten") commenced operations in February 1992.
Mountbatten acts as a holding company for The Mountbatten Surety Company, Inc.
(the "Surety Company") and HMS Dreadnought, Inc.("Dreadnought"). The Surety
Company underwrites performance, payment and other bonds, and is licensed to
conduct business in the Commonwealths of Pennsylvania, Virginia, and Kentucky,
the States of Delaware, Maryland, New Jersey, New York, Ohio, Indiana,
Tennessee, Connecticut, Mississippi, Illinois, Mississippi, and the District of
Columbia. In these jurisdictions, the Surety Company underwrites primarily
construction and performance bonds through independent agents and brokers.
Dreadnought commenced operations in February 1997, and provides escrow, dispute
resolution, claims handling, and construction management services to
Mountbatten. (Mountbatten together with the Surety Company and Dreadnought are
referred to below as the "Company").
Note 2 - Summary of Significant Accounting Policies:
Basis of presentation:
The consolidated financial statements have been prepared in conformity with
generally accepted accounting principles (GAAP). The consolidated financial
statements include the accounts of Mountbatten, Inc.and its subsidiaries. The
preparation of interim financial statements necessarily relies heavily on
estimates. This and certain other factors, such as the seasonal nature of the
surety bond business as well as competitive and other market conditions, call
for caution in drawing specific conclusions from interim results. In the opinion
of management, the interim financial statements reflect all adjustments,
consisting only of normal recurring accruals, necessary for the fair
presentation of the Company's results of operations and financial position for
the periods presented. Operating results for the three month period ended March
31, 1997 are not necessarily indicative of results that can be expected for the
fiscal year ending December 31, 1997. These condensed financial statements
should be read in conjunction with the financial statements and notes thereto
included in Mountbatten's Report on Form 10-KSB for the year ended December 31,
1996.
Revenue recognition:
Premiums are recognized as earned over the estimated period of bond performance
or project completion, which is generally less than one year. Ceded reinsurance
premiums are recognized on a similar basis. Unearned premiums represent the
portion of net premiums applicable to the unexpired portion of the bond. The
estimates are based primarily on management's understanding of a bonded
project's stage of completion supplemented by historical completion patterns.
Cash equivalents:
Cash equivalents include highly liquid money market instruments with original
maturities of three months or less.
Investments:
The Company invests in U.S. Treasury securities with maturities ranging from
several months to five years. The Company's investments in debt securities are
classified as available-for-sale. Accordingly, any changes in carrying value are
reflected as adjustments to Shareholders' Equity.
5
<PAGE>
Note 2 - Summary of Significant Accounting Policies: - (continued)
Reinsurance receivable:
Reinsurance receivable is an estimate of amounts to be received from the Surety
Company's reinsurer on paid and unpaid losses, respectively.
Subrogation recoverable:
The Surety Company requires bond applicants to enter into an indemnity agreement
which obligates the insured to reimburse the Surety Company for any claims paid
and costs incurred that are related to the bond. Subrogation recoverable
represents amounts estimated to be recovered by the Surety Company from bonded
principals for claim costs incurred by the Surety Company after a failure of a
bonded principal to fulfill a bonded obligation. The Company records subrogation
recoverable when a claim is incurred and it is probable that the costs will be
recovered. Changes in estimates of subrogation recoverable are credited or
charged to income in the period in which they are determined and are included in
claims and claim adjustment expenses.
Unpaid claims and claim adjustment expenses:
The reserve for claims and claim adjustment expenses is based on management's
individual case estimates of the ultimate future payments to be made on reported
claims and related expenses, and on estimates for incurred but not reported
("IBNR") claims. Claim reserve estimates are revised by management as new
information becomes available. Changes in these estimates are charged or
credited to income in the period in which they are determined. Claim adjustment
expenses include costs associated directly with specific claims paid or in the
process of settlement.
Note 3 - Income Taxes
The Company files a consolidated income tax return with its wholly owned
subsidiaries, and is a party to a tax sharing agreement. The Company had a
deferred tax asset of $55,039 and $32,223 at March 31, 1997 and December 31,
1996, respectively.
Note 4 - Reinsurance
In the normal course of business, the Company enters into contracts to cede
reinsurance primarily to limit losses from large exposures and to permit
recovery of a portion of direct losses; however, such a transfer of risk does
not relieve the Company from contingent liability for these losses.
The Company's current reinsurance program provides four layers of reinsurance.
Under the first layer, the Company retains 100% of all losses up to $150,000 and
the reinsurer assumes 95% of the next $850,000, subject to a maximum annual
recovery by the Company of $3,230,000. The second layer provides $1,000,000 of
coverage (95% to be assumed by the reinsurer) on any loss discovered for any
principal in excess of the first $1,000,000 of loss with an aggregate annual
maximum of $2,850,000. The third layer provides $2,500,000 of coverage on any
loss discovered for any principal in excess of the first $2,000,000 of loss with
an aggregate annual maximum of $5,000,000. The fourth layer provides $3,000,000
of coverage on any loss discovered for any principal in excess of the first
$4,500,000 with an aggregate annual maximum of $3,000,000.
Effective November 1995, the reinsurance program required that the Company not
write any bond exceeding $5 million or bonds on the same work program in favor
of the principal exceeding $7.5 million in the aggregate. The work program limit
of $7.5 million increased to $10 million effective November 1996.
6
<PAGE>
Note 5 - Statutory Surplus and Dividend Restrictions
The Surety Company is subject to minimum surplus requirements under the
Commonwealth of Pennsylvania insurance laws and regulations. Under applicable
Pennsylvania laws and regulations, the Surety Company is required to maintain a
minimum of $1,125,000 of paid in capital. The maximum amount of dividends which
can be paid by the Surety Company to shareholders without prior approval of the
Insurance Commissioner is subject to restrictions relating to statutory surplus.
Note 6 - Unpaid Claims and Claim Adjustment Expenses and Reinsurance Receivable
The process by which reserves are established for insured events and related
litigation requires reliance upon estimates based on the Surety Company's
limited claims experience, supplemented with available industry data. The Surety
Company's limited claims experience creates uncertainty with respect to the
estimation of loss and loss adjustment expense reserves. As information develops
which varies from expected experience, provides additional data or, in some
cases, augments data which previously was not considered sufficient in
determining reserves, adjustments to reserves may be required. Included in loss
reserves at March 31, 1997 and December 31, 1996 are case reserves totaling
$524,503 and $634,156, respectively, and IBNR reserves of $423,449 and $519,114,
respectively.
Reinsurance receivable of $274,019 at March 31, 1997 includes $269,534 related
to unpaid losses, offset by $30,083 received from the reinsurer as an
overpayment, and $34,568 related to paid losses.
Reinsurance receivable of $294,911 at December 31, 1996 includes $324,994
related to unpaid losses, offset by $30,083 received from the reinsurer as an
overpayment.
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
The Company's principal business activity is to underwrite surety bonds through
its wholly owned subsidiary, the Surety Company. The Surety Company wrote its
first bond in October 1992. In May 1994, the Surety Company received a Treasury
Listing (the "T-Listing") to write federally required bonds anywhere in the
United States and its territories. The following table sets forth information,
chronologically, with respect to those jurisdictions in which the Surety Company
is presently licensed to write bonds:
State Date of Admission
- ----- -----------------
Pennsylvania September 11, 1992
Delaware July 13, 1994
Maryland October 7, 1994
New Jersey March 31, 1995
Virginia August 17, 1995
District of Columbia September 1, 1995
New York October 19, 1995
Ohio November 28, 1995
Kentucky April 26, 1996
Tennessee September 23, 1996
Indiana September 30, 1996
Connecticut December 1, 1996
Mississippi December 1, 1996
Illinois December 5, 1996
South Carolina February 3, 1997
In addition, the Surety Company has applied for a license to underwrite bonds in
Alabama, Georgia, North Carolina, and West Virginia, and anticipates filing
license applications in various other states.
Results of Operations
Three months ended March 31, 1997 compared to three months ended March
31, 1996:
During the three-month period ended March 31, 1997, the Surety Company generated
$1,758,600 of gross written premiums, compared to $1,615,039 of gross written
premiums during the three-month period ended March 31, 1996, representing an
increase of $143,561 or 9%. Management attributes the increase in gross written
premiums primarily to the Surety Company's increased penetration of the states
in which the Surety Company became licensed prior to 1996, and to a lesser
degree the initial penetration of the states in which the Surety Company became
licensed during 1996.
For the three months ended March 31, 1997, gross ceded reinsurance premiums
totaled $279,266, representing approximately 15.88% of gross written premiums.
For the three months ended March 31, 1996, gross ceded reinsurance premiums
totaled $276,582, representing approximately 17.1% of gross written premiums.
The increase in ceded reinsurance premiums was primarily the result of the
increase in gross written premiums, offset by a lower reinsurance rate afforded
the Surety Company under the reinsurance agreement that became effective on
November 1, 1996.
The Company's current reinsurance program provides four layers of reinsurance.
Under the first layer, the Company retains 100% of all losses up to $150,000 and
the reinsurer assumes 95% of the next $850,000, subject to a maximum annual
recovery by the Company of $3,230,000. The second layer provides $1,000,000 of
coverage (95% to be assumed by the reinsurer) on any loss discovered for any
principal in excess of the first $1,000,000 of loss with an aggregate annual
8
<PAGE>
maximum of $2,850,000. The third layer provides $2,500,000 of coverage on any
loss discovered for any principal in excess of the first $2,000,000 of loss with
an aggregate annual maximum of $5,000,000. The fourth layer provides $3,000,000
of coverage on any loss discovered for any principal in excess of the first
$4,500,000 with an aggregate annual maximum of $3,000,000.
Prior to November 1996, the reinsurance program required that the Company not
write any bond exceeding $5 million or bonds on the same work program in favor
of the principal exceeding $7.5 million in the aggregate. The work program limit
of $7.5 million increased to $10 million effective November 1996.
For the three months ended March 31, 1997, claims and claim adjustment expenses
incurred resulted in a benefit of $32,755 (or an incurred loss and loss
adjustment expense benefit ratio of 2.4%), related almost entirely to favorable
development on prior accident years. For the three months ended March 31, 1996,
claims and claim adjustment expenses incurred were $87,121 (or an incurred loss
and loss adjustment expense ratio of 7%), consisting solely of IBNR.
A limited number of claims have been filed on the Surety Company's bonds.
Accordingly, at March 31, 1997 the Surety Company has established case reserves
of $524,503, gross of reinsurance, to provide for future claims and claim
adjustment expense payments.
For the three months ended March 31, 1997, commission expenses were $481,828,
representing approximately 27.4% of gross written premiums, compared to
$496,369, or approximately 30.7% of gross written premiums, for the three months
ended March 31, 1996. The decrease in commission expenses in 1997 relates
primarily to a slightly higher level of "bonus" commissions paid in the 1996
period versus the 1997 period.
For the three-month periods ended March 31, 1997 and 1996, the Company incurred
salary and benefits costs of $334,907 and $224,698, respectively. The increase
in salary and benefit costs in 1997 reflects an increase in the number of
employees, including additional underwriters and related support personnel, as
well as increased compensation levels.
For the three months ended March 31, 1997, the Company incurred $29,279 for
professional services and $188,759 for other operating expenses, compared to
$29,125 and $154,954, respectively, for the similar period in 1996. The increase
in operating expenses reflects the required infrastructure changes to support
the Company's current and expected future levels of gross written premiums in a
greater number of markets.
For the three-month periods ended March 31, 1997 and 1996, the Company generated
$118,605 and $99,610, respectively, of income from its investments, comprised
exclusively of U.S. Government securities. The yield on average invested assets
for the 1997 and 1996 periods was 5.5% and 5.7%, respectively. The increase in
interest income in 1997 is the result of an increased level of average invested
assets, offset by a slightly lower yield.
The provision for income taxes for the three months ended March 31, 1997 was
$167,411 (an effective tax rate of 34%), as compared to $103,823 (an effective
tax rate of 30%) for 1996.
Net income for the three months ended March 31, 1997 was $324,972, as compared
to $248,118 for the three months ended March 31, 1996, an increase of $76,854,
or 31%.
Seasonality
Because most of the Surety Company's premiums are generated on construction
related bonds, and are associated with jobs primarily in mid-atlantic states,
the Surety Company's business has been seasonal. Accordingly, operating results
have varied from quarter to quarter, with premium levels lowest from November to
March. Seasonality is expected to have less of an effect on premium activity as
the Surety Company becomes licensed in states having more temperate climates.
9
<PAGE>
Liquidity and Capital Resources
Initial operations of the Surety Company were financed by contributions from the
Company, principally from the sale of common stock by the Company. Continuing
operations have been financed by internally generated cash flow from operations.
Costs incurred by the Company are shared with the Surety Company under a
services agreement which provides for the Surety Company to reimburse the
Company for costs paid by the Company which are deemed to benefit the Surety
Company. The Surety Company may elect to pay dividends in the future, subject to
the dividend restrictions of the Commonwealth of Pennsylvania insurance laws and
regulations. The Company expects to maintain a high level of liquidity through,
among other things, the continued investment in U.S. government securities and
other high-grade investment instruments.
During 1997, approximately $228,000 of the Company's cash and investment
portfolio was converted to U.S. Treasury Notes in conjunction with the final
licensure requirements of the State of South Carolina. Management anticipates
that additional "deposits" will be required in those states in which the Surety
Company intends to seek a license to write surety bonds.
The Company had approximately $7,936,000 of investments and cash equivalents at
March 31, 1997, and approximately $9,248,000 of investments and cash equivalents
at December 31, 1996. The decrease in investments and cash equivalents at March
31, 1997 results primarily from the payment of federal and state tax
obligations, reinsurance premiums, case reserves, and accrued liabilities that
existed at December 31, 1996.
The Company's anticipated expansion plans will require additional personnel and
financial resources. While certain costs are expected to increase due to the
changes in infrastructure, management believes that the Company and the Surety
Company have adequate liquidity to pay all claims and meet all other obligations
for the next twelve months, at a minimum.
The Surety Company requires capital to support its bond underwriting. Management
believes that the statutory surplus of the Surety Company, which was
approximately $8,310,532 at March 31, 1997, will be sufficient to support the
Surety Company's current and anticipated premiums and losses.
10
<PAGE>
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 3.2 Amended and Restated Articles of Incorporation of
Registrant, as amended (incorporated by reference to Exhibit 3.2 to
Registrant's Form 10-QSB report for the quarter ended March 31, 1996)
Exhibit 3.3 By-Laws of Registrant (incorporated by reference to Exhibit
3.3 of Registrant's Form SB-2 Registration Statement No. 33-78336
declared effective September 1, 1994)
Exhibit 11. Computation of Earnings per Share
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the period for which this
report is filed.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
May 12, 1997 MOUNTBATTEN, INC.
By /s/ Kenneth L. Brier
--------------------------
Kenneth L. Brier
President and Chief Executive Officer
(principal executive officer)
By /s/ Joel D. Cooperman
---------------------------
Joel D. Cooperman
Vice President, Finance, Treasurer, and
Chief Financial Officer
(principal financial and accounting officer)
12
<PAGE>
Exhibit Index
Exhibit No. Description of Exhibit
3.2 Amended and Restated Articles of Incorporation of Registrant,
as amended (incorporated by reference to Exhibit 3.2 of
Registrant's Form 10-QSB report for the quarter ended March
31, 1996)
3.3 By-Laws of the Registrant (incorporated by reference to
Exhibit 3.3 of Registrant's Form SB-2 Registration Statement
No. 33-78336 declared effective September 1, 1994)
11 Computation of Eanings per Share
27 Financial Data Schedule
<PAGE>
EXHIBIT 11
----------
MOUNTBATTEN, INC.
COMPUTATION OF NET INCOME PER SHARE (UNAUDITED)
Primary Net Income Per Share
Three months ended March 31,
1997 1996
---- ----
Net income available to
Common Shareholders $324,973 $248,118
========= =========
Weighted Average Shares:
Common shares 2,528,530 2,528,530
Common shares equivalents
applicable to stock options 248,573 75,075
--------- ---------
Total 2,777,103 2,603,605
========= =========
Primary Net Income per Share $ 0.12 $ 0.10
========= =========
Fully Diluted Net Income Per Share
Net income available to Common Shareholders $324,973 $248,118
========= =========
Weighted Average Shares:
Common shares 2,528,530 2,528,530
Common share equivalents
applicable to stock options 251,149 103,288
--------- ---------
Total 2,779,679 2,631,818
========= =========
Fully Diluted Net Income Per Share $ 0.12 $ 0.09
========= =========
<TABLE> <S> <C>
<ARTICLE> 7
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<DEBT-HELD-FOR-SALE> 7,499,645
<DEBT-CARRYING-VALUE> 0
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 7,449,645
<CASH> 436,588
<RECOVER-REINSURE> 34,568
<DEFERRED-ACQUISITION> 459,866
<TOTAL-ASSETS> 10,966,468
<POLICY-LOSSES> 947,952
<UNEARNED-PREMIUMS> 1,057,639
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
0
<COMMON> 2,529
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 10,966,468
1,758,600
<INVESTMENT-INCOME> 118,605
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 0
<BENEFITS> (32,755)
<UNDERWRITING-AMORTIZATION> (64,618)
<UNDERWRITING-OTHER> 1,099,391
<INCOME-PRETAX> 492,383
<INCOME-TAX> 167,411
<INCOME-CONTINUING> 324,972
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 324,972
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
<RESERVE-OPEN> 1,153,270
<PROVISION-CURRENT> 93,579
<PROVISION-PRIOR> (126,334)
<PAYMENTS-CURRENT> 23,935
<PAYMENTS-PRIOR> 64,121
<RESERVE-CLOSE> 947,952
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
