SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
Commission file number 33-83116
ASSOCIATED BUSINESS & COMMERCE
INSURANCE CORPORATION
(Exact name of Registrant as specified in its charter)
FLORIDA 65-0496132
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation of organization)
4700 NW BOCA RATON BOULEVARD, SUITE 400, BOCA RATON, FL 33431
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (561) 997-0708
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(b) 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 [ ]
The number of the outstanding Preferred Stock held by nonaffiliates of the
Registrant on August 5, 1996 was 243,860 shares.
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ASSOCIATED BUSINESS & COMMERCE
INSURANCE CORPORATION
TABLE OF CONTENTS
Part I. Financial Information
<S> <C>
Statement of Operations (unaudited), three months and six months ended June 30, 1996.....3
Balance Sheets, June 30, 1996 (unaudited) and December 31, 1995..........................4
Statements of Changes in Stockholders' Equity, six months ended
June 30, 1996 (unaudited) and the year ended December 31, 1995.......................6
Statement of Cash Flows (unaudited), six months ended June 30, 1996......................7
Notes to Financial Statements (unaudited) ...............................................8
Management's Discussion and Analysis of Financial Condition and Results of Operations...12
Part II. Other Information
Item 1. Legal Proceedings...............................................................14
Item 2. Changes in Securities...........................................................14
Item 3. Defaults Upon Senior Securities.................................................14
Item 4. Submission of Matters to a Vote of Security Holders.............................14
Item 5. Other Information...............................................................14
Item 6. Exhibits and Reports on Form 8-K................................................14
Signatures................................................................................15
</TABLE>
<PAGE>
PART I FINANCIAL INFORMATION
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1996 AND THE
SIX MONTHS ENDED JUNE 30, 1996
UNAUDITED
THREE MONTHS SIX MONTHS
ENDED ENDED
MARCH 31, 1996 JUNE 30, 1996
-------------- -------------
Revenues:
Standard premium earned, net of discounts $ 6,917,029 $13,641,277
Less premium ceded for reinsurance 4,979,331 9,796,467
----------- -----------
Net premium earned 1,937,698 3,844,810
Less loss and loss adjustment expenses 1,382,313 2,440,036
----------- -----------
Premiums available for operations 555,385 1,404,774
Earned premium LPT transaction 162,757 245,036
Interest earnings 248,041 469,779
----------- -----------
966,183 2,119,589
Policy acquisition and other underwriting
expenses 848,359 1,836,589
----------- -----------
Income before income taxes 117,824 283,000
Income tax expense 40,000 96,000
----------- -----------
Net income $ 77,824 $ 187,000
=========== ===========
Earnings per common share and
common share equivalent $ 0.76 $ 1.40
=========== ===========
The accompanying notes are an integral part of these financial statements.
-3-
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<CAPTION>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
BALANCE SHEET
JUNE 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995
ASSETS
JUNE 30, DECEMBER 31,
1996 1995
(UNAUDITED)
----------- -----------
<S> <C> <C>
Investments with fixed maturities $11,597,372 $14,439,231
Cash and cash equivalents 1,145,017 2,242,245
Premiums receivable, less allowance for
doubtful accounts 1996 $874,679; 1995 $613,125 4,771,982 4,849,556
Reinsurance and related recoverables:
Paid loss recoverable 369,581 94,598
Loss and loss adjustment expenses 17,634,142 14,471,111
Prepaid reinsurance premiums 186,776 530,957
Advances receivable 462,397 175,832
Accrued investment income 157,475 211,277
Prepaid expenses 663,830 1,821,000
Deferred income taxes 988,000 1,084,000
Deferred policy acquisition costs 587,501 389,737
Equipment, less accumulated depreciation
1996 $36,163; 1995 $4,837 525,594 289,871
Other assets, net 82,063 101,202
----------- -----------
$39,171,730 $40,700,617
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-4-
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<TABLE>
<CAPTION>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
BALANCE SHEET - CONTINUED
JUNE 30, 1996 (UNAUDITED) AND DECEMBER 31, 1995
RESERVES, LIABILITIES AND STOCKHOLDERS' EQUITY
JUNE 30, DECEMBER 31,
1996 1995
----------- ------------
(UNAUDITED)
<S> <C> <C>
Reserves for losses and loss adjustment expenses $27,379,052 $28,306,416
Liabilities:
Accounts payable and accrued expenses 2,385,285 2,709,469
Unearned and return premium payable 2,945,161 2,346,983
Deferred gain on loss portfolio transfer 515,842 760,878
Accrued income taxes and special tax deposits 28,200 1,078,200
----------- -----------
5,874,488 6,895,530
Commitments and contingencies
Total reserves and liabilities 33,253,540 35,201,946
Stockholders' equity:
Convertible preferred stock series A, 6% cumulative,
$1 par value, authorized shares 1,900,000; issued and
outstanding 249,454 shares (aggregate liquidation
preference of $2,494,540 at June 30, 1996) 249,454 221,805
Additional paid - in capital, preferred series A 2,245,086 1,996,245
Convertible preferred stock series B, $1 par value,
authorized, issued and outstanding 3,200,000 shares 3,200,000 3,200,000
Common stock, $1 par value, authorized 15,000,000
shares; 102,501 shares issued and outstanding 102,501 102,501
Retained earnings (deficit) 121,149 (21,880)
----------- ------------
5,918,190 5,498,671
----------- ------------
$39,171,730 $ 40,700,617
=========== ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
-5-
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<TABLE>
<CAPTION>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND
THE YEAR ENDED DECEMBER 31, 1995
ADDITIONAL
PAID - IN
PREFERRED STOCK CAPITAL RETAINED
--------------------- PREFERRED COMMON EARNINGS
SERIES A SERIES B SERIES A STOCK (DEFICIT)
-------- -------- ----------- -------- ----------
<S> <C> <C> <C> <C> <C>
Balance, beginning of period $ -- $ -- $ -- $ 102,501 $ (10,245)
Preferred stock issued
for cash 221,805 3,200,000 1,996,845
Net (loss) (11,635)
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1995 221,805 3,200,000 1,996,845 102,501 (21,880)
Preferred stock issued
for cash (Unaudited) 27,649 248,841
Dividends to preferred
stockholders (Unaudited) (43,971)
Net income (Unaudited) 187,000
---------- ---------- ---------- ---------- ----------
Balance June 30,
1996 (Unaudited) $ 249,454 $3,200,000 $2,245,686 $ 102,501 $ 121,149
========== ========== ========== ========== ==========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-6-
<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
OPERATING ACTIVITIES
Net income $ 187,000
Adjustments:
Change in net insurance reserves (4,365,378)
Change in premiums receivable 77,574
Accrued income taxes (1,050,000)
Other 1,543,419
-----------
Net cash and cash equivalents
(used in) operating activities (3,607,385)
-----------
INVESTING ACTIVITIES
Proceeds from investment maturities 2,815,140
Proceeds for other assets, net (3,888)
Purchase of equipment (247,049)
Payments of advances, net (286,565)
-----------
Net cash and cash equivalents
provided by investing activities 2,277,638
-----------
FINANCING ACTIVITIES
Payment of preferred dividends (43,971)
Proceeds from issuance of preferred stock 276,490
-----------
Net cash and cash equivalents provided
by financing activities 232,519
-----------
Net (decrease) in cash and cash equivalents (1,097,228)
Cash and cash equivalents, beginning of period 2,242,245
-----------
Cash and cash equivalents, end of period $ 1,145,017
===========
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
UNAUDITED
NOTE 1 - BASIS OF PRESENTATION
The financial information presented as of any date other than December 31
has been prepared from the books and records without audit. Financial
information as of December 31 has been derived from the audited financial
statements of the Company, but does not include all disclosures required by
generally accepted accounting principles.
The accompanying financial statements have been prepared in conformity with
generally accepted accounting principles.
These financial statements rely, in part, on estimates. In the opinion of
management, all necessary adjustments have been reflected for a fair
presentation of the results of operations, financial position and cash flows
in the accompanying unaudited financial statements. The results for the
period are not necessarily indicative of the results to be expected for the
entire year.
Reference should be made to the "Notes to Financial Statements" on pages F -
8 through F - 22 of the registrant's Form 10 - K for the year ended December
31, 1995. The amounts in those notes have not changed except as a result of
transactions in the ordinary course of business or as otherwise disclosed in
these notes.
Some figures in the 1995 financial statements have been reclassified to
conform with the 1996 presentation. These reclassifications have no effect
on net income or stockholders' equity, as previously reported.
Comparative results of operations and cash flow information is not presented
because the registrant did not begin insurance operations until December
1995. Activity until that time was limited to organizational activities.
NOTE 2 - INVESTMENTS
Investment activity for the period ending June 30, 1996 consisted of the
collection of maturities, early call proceeds and proceeds from the sale of
certain available for sale fixed maturity securities, which totalled
$2,813,631. Market value of the Company's available for sale fixed maturity
securities continued to approximate amortized cost; accordingly no provision
for appreciation (depreciation) in investments is recorded in stockholders'
equity.
-8-
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ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
UNAUDITED
NOTE 3 - EARNINGS PER SHARE
Earnings per common share were calculated by dividing net income by the
adjusted average number of common shares outstanding. Net income was
adjusted by preferred dividends declared and paid during April 1996. There
was no change in the average number of outstanding common shares from
December 31, 1995, and there was no dilution of common stock because the
preferred stock is not convertible to common stock before January 1, 2000.
The calculation of earnings per share for the three and six month periods
ended June 30, 1996 is based upon the following information:
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THREE MONTHS SIX MONTHS
ENDED ENDED
MARCH 31, 1996 JUNE 30, 1996
--------------- -------------
<S> <C> <C>
Net income $ 77,824 $ 187,000
Dividends applicable to Convertible Series A,
6% cumulative preferred stock - (43,971)
---------- ------------
$ 77,824 $ 143,029
========== ============
</TABLE>
NOTE 4 - INCOME TAXES
The provision for income taxes for the period ended June 30, 1996 is as
follows:
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<S> <C>
Federal income taxes currently payable (refundable) $ -
Deferred federal income taxes 96,000
------------
$ 96,000
============
</TABLE>
NOTE 5 - REINSURANCE
The Company's financial statements reflect the effects of ceded reinsurance
transactions. The Company does not assume reinsurance in the ordinary course
of business. However, effective November 30, 1995, the Company, in a
transaction approved by the Florida Department of Insurance, assumed the
insurance assets and liabilities of Associated Business & Commerce Workers'
Compensation Self - Insurance Fund, the Company's predecessor (the "Fund"),
by virtue of a loss portfolio transaction ("LPT"). The excess of premium
received over losses assumed was treated as deferred LPT premium on the
balance sheet.
The deferred LPT premium is earned in the ratio of assumed losses paid to
total assumed losses. Deferred LPT premium earned for the period ended June
30, 1996 totalled $245,036.
Ceded reinsurance involves transferring certain risks the Company has
underwritten to other insurance companies who agree to share these risks.
The primary purpose of ceded reinsurance is to protect the Company from
potential losses in excess of the amount it is prepared to accept.
-9-
<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
UNAUDITED
NOTE 5 - REINSURANCE (CONTINUED)
The Company expects those with whom it has ceded reinsurance to honor their
obligations. In the event these companies are unable to honor their
obligations, the Company will pay the shortfall.
The following table summarizes the effect of reinsurance on premiums earned
and insurance losses and loss adjustment expenses for the period ended June
30, 1996:
Premiums earned:
Direct $ 13,641,277
Ceded (9,796,467)
--------------
Net premiums earned $ 3,844,810
==============
Insurance losses and loss adjustment expenses:
Direct $ 8,290,933
Ceded (5,850,897
--------------
Net insurance losses $ 2,440,036
==============
NOTE 6 - LEGAL PROCEEDINGS
From time to time, the Company may be involved in workers' compensation
proceedings relating to claims arising out of its operations in the normal
course of business. As of the filing date of the Form 10-Q, the Company is
not party to any legal proceedings outside of its ordinary workers
compensation settlement business which management believes would materially
affect the financial position or operations of the Company with the
exception of the matter described below.
In July 1992, the Fund filed a lawsuit in the State Circuit Court of Palm
Beach County, Florida, forbreach of contract against Advanced Risk
Management Incorporated ("ARMI") claiming damages for excess fees and
advances collected by ARMI, the former service company of the Fund. A
counterclaim was filed by ARMI alleging breach of contract, breach of
fiduciary duty and fraud. On January 2, 1994, the court granted summary
judgment in favor of the Fund with respect to all of the counterclaims made
by ARMI. The summary judgment was appealed by ARMI and reversed by the
Fourth District Court of Appeal, which remanded the matter back to the trial
court to resolve specific issues. On December 15, 1995 the trial court
granted the Fund's renewed motion for summary judgment. ARMI has filed an
appeal as to this judgment as well. The Fund intends to continue to pursue
and defend this claim on its own behalf. There can be no assurance however,
that, in the event of an unfavorable ruling against the Fund, recovery would
not be sought from the Company. In the event there is an unfavorable
outcome, which management believes to be unlikely, the Fund's liability is
estimated at less than $1,000,000, for which the Company would be
responsible.
-10-
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ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
UNAUDITED
NOTE 6 - RELATED PARTY TRANSACTIONS
All of the Company's outstanding common stock as well as all of the
outstanding Series B preferred stock are owned by the Company's parent,
Associated Business & Commerce Holdings, Inc. ("Holdings"). Holdings was
organized in March 1995 for the purpose of providing financing and
performing certain management services for the Company under a management
agreement. All common stock and Series B preferred stock have been pledged
as collateral against a note payable issued by Holdings.
The note payable of Holdings was issued to the Company's quota share
reinsurer, Underwriters Reinsurance Company ("Underwriters"). The loan bears
interest at 12.75% per annum, and, if not prepaid, is due on September 30,
2000. Holdings expects to repay the loan from fees paid by the Company under
a management agreement.
Holdings renegotiated the loan agreement with Underwriters during the second
quarter of 1996, reducing the level of cash flows required for debt service,
and concurrently reduced the management fee to 11.3% of written premium. The
management agreement originally called for the Company to pay 14.1% of
written premium to Holdings in return for Holdings performing certain
administrative functions and paying certain costs on behalf of the Company.
Management fee expense incurred by the Company under the terms of this
renegotiated agreement totaled $1,693,002 for the period ended June 30,
1996.
Policy acquisition and other underwriting expenses reflected in the
statement of operations for the period period ended June 30, 1996 are net of
$2,394, 679 in ceding commissions paid to the Company by Underwriters.
The advances receivable at June 30, 1996 of $462,397 represents working
capital advances to Holdings which are non - interest bearing and will be
repaid as cash flow of Holdings permits.
NOTE 7 - STOCKHOLDERS' EQUITY
On May 2, 1996, the Company's Board of Directors adopted an amendment to its
articles of incorporation to increase the number of authorized shares of 6%
Cumulative Convertible Preferred Stock, Series A, from 900,000 to 1,900,000.
-11-
<PAGE>
ASSOCIATED BUSINESS & COMMERCE
INSURANCE CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
June 30, 1996
RESULTS OF OPERATIONS
The Company is reporting income before taxes for the first two quarters of 1996
of $283,000 based on premium volume of $13,600,000. Annualized premium as of
June 30, 1996 amounts to approximately $27,300,000 or a slight reduction from
the calendar year 1995 amount of $27,900,000. As discussed in the Company's Form
10-K for 1995, certain insureds elected not to renew their coverage with the
Company effective January 1, 1996, which management perceived as being the
result of increased competition generated by favorable 1993 legislative changes
and also the late date in 1995 that the Company completed its plan to announce
the availability of non-assessable insurance coverage. Since the Form 10-K was
prepared and filed, the Company has written new business which has resulted in a
restoration to 1995 writing levels. The adjustments to premium pricing and
availability factors as discussed in the Form 10-K have resulted in a greater
portion of submissions being accepted by potential customers. Although writings
have been restored to 1995 levels, leading management to be optimistic regarding
the Company's 1996 writings, the adjustments to budgeted expenditures made by
management in response to the reduction of January 1, 1996 renewals remain in
place, to be modified only to the extent required by increasing premium volume.
As a result of the full absorption of the Company's 70% quota-share
arrangements, earned premiums ceded for reinsurance (including excess loss
re-insurance) amounts to 71.8% of earned premium. Loss and operating expense
ratios are effected somewhat by the ceding of premium in comparison to 1995's
ratios during which the quota-share treaty was only in effect for the last
quarter of the year.
For the first two quarters of 1996, the loss and loss expense ratio is 63.5% and
the expense ratio is 47.8% or a combined ratio of 111.2%. The investment ratio
(interest and investment earnings divided by net earned premium) amounted to
12.2% for the second quarter resulting in an overall operating ratio of 99%.
Included within the statement of operations is recognition of deferred gain on
the loss portfolio transfer transaction between the Company and the Fund of
approximately $245,000. Without the recognition of this gain, the Company would
have recorded operating income before income taxes of approximately $38,000.
For the six months ended June 30, 1995, the Fund reported earned premium of
approximately $13,600,000 and income before taxes of approximately $354,000 in
its unaudited financial statements. The Fund was not a party to any quota-share
reinsurance treaty during that period nor was any management agreement in effect
as is the case with the Company for 1996. Policy acquisition and other
underwriting expenses for the Company for the first quarter included
approximately $144,000 of amounts paid to Holdings, which was utilized by
Holdings for debt service on its loan from Underwriters. However, based upon
Holdings renegotiating the terms of its note payable to Underwriters, no amount
of the management fee was used for debt service during the second quarter.
As indicated above, Holdings renegotiated its note payable with Underwriters
during the second quarter ended June 30, 1996. Under the revised agreement, no
principal or interest payments are payable until March 31, 1997, and
Underwriters will refund all principal and interest payments made through June
30, 1996. All other terms of the note remain unchanged.
-12-
<PAGE>
ASSOCIATED BUSINESS & COMMERCE
INSURANCE CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
June 30, 1996
LIQUIDITY AND CAPITAL RESOURCES
As was anticipated and described in the Company's Form 10-K, cash flows from
operating activities for the first two quarters was a negative $3,600,000. This
was anticipated because of the Company's quota-share arrangements with
Underwriters. Such negative cash flows from operations were offset by proceeds
from investment maturities and other investment activities realizing cash flows
of approximately $2,300,000 and from proceeds from the issuance of additional
Series A preferred stock of approximately $276,000 resulting in an overall
decrease in cash and cash equivalents for the six months ended June 30, 1996 of
approximately $1,100,000.
Invested assets reduced from $14,400,000 at the end of 1995 to $11,600,000 as of
June 30, 1996 with a decrease in cash of approximately $1,100,000. Negative cash
flows from operations are expected to continue throughout 1996 as funding of the
quota-share recoverables continues by virtue of the transfer of premium to the
quota-share reinsurer pursuant to the quota-share treaty. As claims are settled
and paid in the future, management anticipates that such negative flows will
eventually reverse or stabilize as reimbursements due from the reinsurer for
claims paid and other reimbursements for operating expenses equal or exceed
premiums due pursuant to the treaty.
On a statutory basis, the Company is reporting statutory surplus of
approximately $4,900,000 and statutory net income of $893,000 for the six months
ended June 30, 1996. Based upon the Company's current writings, required
statutory surplus is the minimum of $4,000,000, pursuant to Florida's Insurance
Code.
On May 2, 1996, the Company's Board of Directors adopted an amendment to its
articles of incorporation to increase the number of authorized shares of 6%
Cumulative Convertible Preferred Stock, Series A, from 900,000 to 1,900,000.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE
INSURANCE CORPORATION
Part II Other Information
ITEM 1. LEGAL PROCEEDINGS
There have been no significant developments in those matters discussed in Item 3
of the Company's Form 10-K for 1995.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
a) EXHIBIT INDEX
Exhibit 27 Financial Data Schedule
b) Reports on Form 8-K - The Company filed no reports on Form 8-K during
the quarter ended June 30, 1996.
<PAGE>
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.
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
Registrant
Date: August 21, 1996 /s/ JAMES R. NAU
----------------------------------------------------
James R. Nau
President
Date: August 20, 1996 /s/ CLIFFORD G. MERRITT
----------------------------------------------------
Clifford G. Merritt
Vice President, Finance
(Principal Financial and Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1996
AND THE UNAUDITED BALANCE SHEET AS OF JUNE 30, 1996 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<DEBT-HELD-FOR-SALE> 2,364,145
<DEBT-CARRYING-VALUE> 9,233,227
<DEBT-MARKET-VALUE> 8,947,096
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 11,597,372
<CASH> 1,145,017
<RECOVER-REINSURE> 369,581
<DEFERRED-ACQUISITION> 587,501
<TOTAL-ASSETS> 39,171,730
<POLICY-LOSSES> 27,379,052
<UNEARNED-PREMIUMS> 2,945,161
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
5,694,540
<COMMON> 102,501
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 39,171,730
3,844,810
<INVESTMENT-INCOME> 469,779
<INVESTMENT-GAINS> 0
<OTHER-INCOME> 245,036
<BENEFITS> 2,440,036
<UNDERWRITING-AMORTIZATION> 953,211
<UNDERWRITING-OTHER> 0
<INCOME-PRETAX> 283,000
<INCOME-TAX> 96,000
<INCOME-CONTINUING> 187,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 187,000
<EPS-PRIMARY> 1.40
<EPS-DILUTED> 1.40
<RESERVE-OPEN> 28,306,416
<PROVISION-CURRENT> 2,440,036
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 321,421
<PAYMENTS-PRIOR> 4,043,957
<RESERVE-CLOSE> 27,379,052
<CUMULATIVE-DEFICIENCY> 0
</TABLE>