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, 1997
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 8 1997, was 220,817 shares.
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ASSOCIATED BUSINESS & COMMERCE
INSURANCE CORPORATION
TABLE OF CONTENTS
<S> <C>
PART I. Financial Information
Statements of Operations (unaudited), three months ended June 30, 1997 and 1996.................3
Statements of Operations (unaudited), six months ended June 30, 1997 and 1996...................4
Balance Sheets, June 30, 1997 (unaudited) and December 31, 1996.................................5
Statements of Changes in Stockholders' Equity, six months ended
June 30, 1997 (unaudited) and the year ended December 31, 1996................................7
Statement of Cash Flows (unaudited), six months ended June 30, 1997 ............................8
Notes to Financial Statements (unaudited) ......................................................9
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
Exhibits...........................................................................................
</TABLE>
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
UNAUDITED
FOR THE THREE MONTHS ENDED
--------------------------
JUNE 30, JUNE 30,
1997 1996
----------- -----------
Revenues:
Standard premium earned, net of discounts $ 9,245,798 $ 6,806,527
Less premium ceded for reinsurance 6,639,915 4,817,136
----------- -----------
Net premium earned 2,605,883 1,989,391
----------- -----------
Less Loss and loss adjustment expenses 1,650,883 1,057,723
----------- -----------
Premiums available for operations 955,131 931,668
Interest earnings 174,874 221,738
----------- -----------
Policy acquisition and other underwriting
expenses 1,385,367 988,230
----------- -----------
Income (loss) before income taxes (255,362) 165,176
Income tax expense (credits) (87,000) 56,000
----------- -----------
Net income (loss) $ (168,362) $ 109,176
=========== ===========
Earnings (loss) per common share and
common share equivalent $ (1.64) $ 0.64
=========== ===========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENT OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
UNAUDITED
FOR THE THREE MONTHS ENDED
--------------------------
JUNE 30, JUNE 30,
1997 1996
----------- -----------
Revenues:
Standard premium earned, net of discounts $ 16,032,491 $ 13,886,313
Less premium ceded for reinsurance 11,534,789 9,796,467
------------ ------------
Net premium earned 4,497,702 4,089,846
------------ ------------
Less Loss and loss adjustment expenses 2,922,277 2,440,036
------------ ------------
Premiums available for operations 1,575,425 1,649,810
Interest earnings 292,554 469,779
------------ ------------
Policy acquisition and other underwriting
expenses 2,298,096 1,836,589
------------ ------------
Income (loss) before income taxes (430,117) 283,000
Income tax expense (credits) (146,000) 96,000
------------ ------------
Net income (loss) $ (284,117) $ 187,000
============ ============
Earnings (loss) per common share and
common share equivalent $ (2.77) $ 1.40
============ ============
The accompanying notes are an integral part of these financial statements.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
BALANCE SHEETS
JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
ASSETS
JUNE 30 DECEMBER 31,
1997 1996
----------- ------------
(Unaudited)
Investments with fixed maturities $ 7,198,821 $ 8,708,519
Cash and cash equivalents 827,741 2,155,583
Premiums receivable, less allowance for
doubtful accounts 1997 $1,552,856;
1996 $1,247,602 7,604,339 4,078,520
Reinsurance and related recoverables:
Paid claim recoverable 79,751 --
Loss and loss adjustment expenses 23,025,864 21,516,000
Prepaid reinsurance premiums -- 49,782
Accrued investment income 91,840 122,318
Prepaid expenses 2,200,113 3,200,485
Deferred and refundable income taxes 861,000 1,474,093
Deferred policy acquisition costs 286,428 260,004
Equipment, less accumulated depreciation
1997 $186,164; 1996 $102,709 625,851 640,202
Other assets, net 73,921 76,948
----------- -----------
$42,875,669 $42,282,454
=========== ===========
The accompanying notes are an integral part of these financial statements.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
BALANCE SHEETS - CONTINUED
JUNE 30, 1997 (UNAUDITED) AND DECEMBER 31, 1996
RESERVES, LIABILITIES AND STOCKHOLDERS' EQUITY
JUNE 30 DECEMBER 31,
1997 1996
----------- -------------
(Unaudited)
Reserves for losses and loss adjustment expenses $ 29,898,561 $ 31,982,392
Liabilities:
Accounts payable and accrued expenses 2,834,381 2,099,679
Unearned and return premium payable 3,080,609 2,411,708
Advances from parent 396,938 --
Income taxes payable 80,804 --
Deferred gain on loss portfolio transfer 494,209 644,209
------------ ------------
6,886,941 5,155,596
Commitments and contingencies
Total reserves and liabilities 36,785,502 37,137,988
Stockholders' equity:
Convertible preferred stock series A, 6%
cumulative, $1 par value, authorized shares
1,900,000; 223,144 shares outstanding at
June 30, 1997; 248,885 shares issued and
outstanding at December 31, 1996 aggregate
liquidation preference of $2,231,440 at
June 30, 1997 and $2,488,850 at December 31,
1996 223,144 248,885
Additional paid-in capital, preferred series A 2,008,296 2,251,816
Convertible preferred stock series B, $1 par
value, authorized, issued and outstanding
5,100,000 shares at June 30, 1997 and
3,600,000 shares at December 31, 1996 5,100,000 3,600,000
Common stock, $1 par value, authorized
15,000,000 shares; 102,501 shares issued
and outstanding at June 30, 1997 and
December 31, 1996 102,501 102,501
Accumulated (deficit) (1,343,774) (1,058,736)
------------ ------------
6,090,167 5,144,466
------------ ------------
$ 42,875,669 $ 42,282,454
============ ============
The accompanying notes are an integral part of these financial statements.
-6-
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<TABLE>
<CAPTION>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1997 (UNAUDITED) AND
THE YEAR ENDED DECEMBER 31, 1996
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, January 1, 1996 $ 221,805 $ 3,200,000 $ 1,996,845 $ 102,501 $ (21,880)
Preferred stock issued 55,972 400,000 503,748 -- --
Preferred stock canceled (28,892) -- (248,177) -- --
Preferred dividends
paid at $.60 per share -- -- -- -- (114,227)
Net (loss) -- -- -- -- (922,629)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1996 248,885 3,600,000 2,252,416 102,501 (1,058,736)
Preferred stock issued
(Unaudited) 4,888 1,500,000 242 -- --
Preferred stock canceled
(Unaudited) (30,629) -- (244,362) -- --
Preferred series A dividends
paid -- -- -- -- (921)
Net income (Unaudited -- -- -- -- (284,117)
----------- ----------- ----------- ----------- -----------
Balance June 30, 1997
(Unaudited) $ 223,144 $ 5,100,000 $ 2,008,296 $ 102,501 $(1,343,774)
=========== =========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
-7-
<PAGE>
<TABLE>
<CAPTION>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
(UNAUDITED)
JUNE 30, JUNE 30,
OPERATING ACTIVITIES 1997 1996
----------- -----------
<S> <C> <C>
Net income (loss) $ (284,117) $ 187,000
Adjustments:
Change in net insurance reserves (3,593,695) (4,365,378)
Change in premiums receivable (3,525,819) 77,574
Deferred and refundable income taxes 613,093 98,000
Accrued income taxes 80,804 (1,050,000)
Other 2,318,773 1,445,419
----------- -----------
Net cash and cash equivalents
(used in) operating activities (4,390,961) (3,607,385)
----------- -----------
INVESTING ACTIVITIES
Proceeds from investment dispositions and maturities 2,694,242 2,815,140
Purchase of investments (1,190,781) --
Payments for other assets -- (3,888)
Purchase of equipment (67,098) (247,049)
Payments of advances, net -- (286,565)
----------- -----------
Net cash and cash equivalents
provided by investing activities 1,436,363 2,277,638
----------- -----------
FINANCING ACTIVITIES
Net advances received from parent 396,938 --
Preferred series A dividends paid -- (43,971)
Net proceeds from issuance of preferred stock 1,229,818 276,490
----------- -----------
Net cash and cash equivalents provided
by financing activities 1,626,756 232,519
----------- -----------
Net increase (decrease) in cash and cash equivalents (1,327,842) (1,097,228)
Cash and cash equivalents, beginning of period 2,155,583 2,242,245
----------- -----------
Cash and cash equivalents, end of period $ 827,741 $ 1,145,017
=========== ===========
The accompanying notes are an integral part of these financial statements.
</TABLE>
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1997 AND 1996
UNAUDITED
NOTE 1 - BASIS OF PRESENTATION
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-27 of the registrant's Form 10-K for the year ended December
31, 1996. 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 1996 financial statements have been reclassified to
conform with the 1997 presentation. These reclassifications have no effect
on net income or stockholders' equity, as previously reported.
NOTE 2 - EARNINGS PER SHARE
Earnings per common share were calculated by dividing net income by the
adjusted average number of common shares outstanding. 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 six month periods ended June 30, 1997 and 1996
is based upon the following information:
June 30, 1997 June 30, 1996
------------- -------------
Net income (loss) $ (284,117) $ 187,000
Dividends applicable to Convertible
Series A, 6% cumulative preferred stock -- (43,971)
------------- -------------
$ (284,117) $ 143,029
============ =============
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<PAGE>
NOTE 3 - INVESTMENTS
Investment activity for the period ending June 30, 1997 consisted of the
collection of maturities fixed maturity securities and proceeds from the
sale of securities to comply with regulatory portfolio requirements.
Investment activity for the period ending June 30, 1996 consisted entirely
of the collection of maturities and early call proceeds of fixed maturity
securities.
NOTE 4 - INCOME TAXES
The provision for income taxes for the periods ended June 30, 1997 and 1996
are as follows:
1997 1996
----------- ----------
Federal income taxes currently payable
(refundable) $ -- $ --
Deferred federal income taxes (146,000) 96,000
----------- ----------
$ (146,000) $ 96,000
=========== ==========
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 by virtue of a loss portfolio
transaction. 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 periods ended
June 30, 1997 and 1996 totalled $150,000 and $245,036, respectively.
Reinsurance contracts do nor relieve the Company from its obligation to pay
claims. Reinsurance does 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.
Effective January 1, 1997, the Company has modified its quota share
reinsurance arrangements. The Company now cedes 50% of written premium to
TIG Reinsurance Company("TIG") and 20% to Underwriters Reinsurance Company
("Underwriters") with the corresponding assumption by TIG and Underwriters
of the Company's loss and loss adjustment expenses.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
STATEMENT OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 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 periods ended
June 30, 1997 and 1996:
<TABLE>
<CAPTION>
Premiums earned: 1997 1996
------------ ------------
<S> <C> <C>
Direct $ 15,882,491 $ 13,641,277
Recognized from LPT deferred gain 150,000 245,036
Ceded (11,534,789) (9,796,467)
------------ ------------
Net premiums earned $ 4,497,702 $ 4,089,846
============ ============
Insurance losses and loss adjustment expenses:
Direct $ 9,519,569 $ 8,290,933
Ceded (6,334,792) (5,850,897)
------------ ------------
Net insurance losses $ 3,184,777 $ 2,440,036
============ ============
</TABLE>
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 date of this filing, the Company is not a
party to any legal proceedings outside of its ordinary workers compensation
settlement business or proceedings instituted by the Company for premium
collection which management believes would materially affect the financial
position or operations of the Company with the exception of the matter
described below.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
June 30, 1997
RESULTS OF OPERATIONS
The Company is reporting a net loss before taxes for the second quarter of 1997
of $255,362 based on premium volume of approximately $7.8 million for the
quarter compared to income before taxes for the second quarter of 1996 of
$165,176 based upon premium volume of $7.0 million. The net loss before taxes
for the first six months is $430,117 compared to a gain of $283,000 for the
first six months of 1996. Annualized premium as of June 30, 1997 amounts to
approximately $32 million compared to approximately $28 million reported for
calendar year 1996 in the Company's Form 10-K. The Company's loss ratio
increased from 53.1% for the quarter ended June 30, 1996 to 63.3% for the
quarter ended June 30, 1997. The year to date loss ratio for 1997 is 64.9% as
compared to 59.7% for the first six months of 1996. The 1997 loss ratio is
higher due to an effort to strengthen loss reserves in the first half of 1997.
These reserves will be adjusted after an actuarial analysis is completed.
The operating expense ratio increased from 49.7% for the second quarter of 1996
to 53.1% for the second quarter of 1997. The operating expense ratio for six
months is 51.1% compared to 44.9% for six months 1996. The primary reason for
these increases is due to increases in marketing and underwriting personnel and
costs associated with the programming and implementation of the Company's new
policy administration software. These additions to personnel and other increased
costs were anticipated by the Company in order to stimulate growth in premium
writings which is the Company's primary emphasis. Increases in operating costs
without corresponding premium increase necessarily results in a deterioration of
the operating expense ratio.
The combined ratio, which is the sum of the loss ratio and expense ratio,
increased from 102.8% for the second quarter of 1996 to 116.4% for the second
quarter of 1997. The years loss and expense ratio increased from 104.6% in June
1996 to 109.5% as of June 1997. The investment ratio (investment incomes divided
by net earned premium) decreased from 11.1 for the second quarter of 1996 to
6.7% for the second quarter of 1997 resulting in operating ratios of 91.7% for
the second quarter of 1996 and 109.7% for the second quarter of 1997. The
operating ratio for the year is 109.5% for 1997 and 93.1 % for 1996.
As reported in the Company's Form 10-K, premium ceded to reinsurers includes
proportional quota-share reinsurance at a 70% cession level, which is comparable
to the second quarter of 1996. As a result of the refinancing undertaken by the
Company's parent, Associated Business and Commerce Holdings, Inc. ("Holdings")
with TIG Reinsurance Company as discussed below, the quota-share reinsurance
provisions for 1997 differ from those in effect for 1996 through an increase in
the effective ceding commission from 27% in 1996 to approximately 28.3% for
1997.
As suggested above, the Company's primary emphasis is being directed toward the
development of new agency relationships and enhancements of product offerings to
existing insureds in an effort to increase premium volume in order to offset the
effects of the increases in fixed overhead. Without an increase in premium
volume, the Company may be forced to undertake reductions in overhead,
re-negotiate quota-share arrangements or take such other actions which could
adversely impact the Company's long term growth plan.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE INSURANCE CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
June 30, 1997
For statutory purposes, the Company reported a net after tax loss of $279,113
for the second quarter of 1997 compared to statutory income of $871,273 for the
second quarter of 1996. After tax statutory losses for the six months ending
June 30, 1997 are $282,858 compared to a gain of $892,827 at June 30, 1996. The
primary differences in Statutory reporting compared to GAAP reporting relate to
the provision for income taxes at the statutory level. This expense is
decreasing due to a decrease in the Company's net reserve as a result of the
full absorption of the 70% quota-share arrangements.
LIQUIDITY AND CAPITAL RESOURCES
As anticipated, cash flows from operating activities for the first six months of
1997 were a negative $1.3 million compared to negative cash flows of $1.1
million for the first six months of 1996. Continuing negative cash flows from
operations has been anticipated because of the Company's quota-share
arrangements with its reinsurers.
The Company's quota-share arrangements commenced effective October 1, 1995 and
it is anticipated that payments to the reinsurers pursuant to the quota-share
treaties will exceed the amount of claim recoveries due from the reinsurers
through the end of 1997. Depending upon premium growth, it is expected that
amounts due from reinsurers for claim recoveries will offset amounts otherwise
due for ceded premium with no further adverse impact upon cash flows. However,
if the Company's operating expenses, net of quota-share reimbursements, exceed
net operating revenues, then cash flows may continue negative requiring further
liquidation of fixed-maturity investments.
As described in the Company's Form 10-K, and as set forth within the statement
of changes in stockholders equity included in this filing, Holdings has invested
an additional $1,900,000 in the Company's Series B Preferred Stock between
December, 1996 and March 31, 1997 pursuant to Holdings' refinancing of its debt
to Underwriters Reinsurance Company. TIG Reinsurance Company has invested a
total of $6,000,000 in Holdings which has effectively increased Holdings'
investment in the Company by $2,400,000, of which $1,900,000 is in the form of
Series B Preferred and an additional $500,000 in the form of a working capital
advance. These new proceeds will further the Company's ability to weather the
current soft market of workers' compensation insurance in Florida and will
provide a cushion to the Company's statutory surplus which, as of June 30, 1997,
is at approximately $5.2 million or approximately $1.2 million in excess of the
current surplus required by statute of $4,000,000.
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<PAGE>
ASSOCIATED BUSINESS & COMMERCE
Part II Other Information
June 30, 1997
ITEM I. LEGAL PROCEEDINGS
There have been no significant developments in those matters discussed in Item 3
of the Company's Form 10-K for 1996.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
The semi-annual dividend of $.30 which would have payable on April 1, 1997 on
the 6% Cumulative Preferred Series A stock has not been declared or paid . The
total amount of such arrearage on the date of the filing of this report is
$68,974. The dividends accrue in accordance with the term of the Preferred
Series A stock.
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.
Not Applicable
EXHIBIT INDEX
a) Exhibit 27 Financial Data Schedule
b) Reports on Form 8-K - The Company filed no reports on Form 8-K
during the six months ending June 30, 1997.
-14-
<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 15, 1997 /s/ JAMES R. NAU
--------------------------------
James R. Nau
President
Date: August 15, 1997 /s/ DONALD J. MORRIS
--------------------------------
Donald J. Morris
Vice President
(Principal Financial and Accounting Officer)
<PAGE>
EXHIBIT INDEX
EXHIBIT
- -------
27 Financial Data Schedule (for SEC use only).
<TABLE> <S> <C>
<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
STATEMENT OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND THE BALANCE
SHEET AS OF JUNE 30, 1997 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-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<DEBT-HELD-FOR-SALE> 0
<DEBT-CARRYING-VALUE> 7,192,821
<DEBT-MARKET-VALUE> 0
<EQUITIES> 0
<MORTGAGE> 0
<REAL-ESTATE> 0
<TOTAL-INVEST> 7,192,821
<CASH> 827,741
<RECOVER-REINSURE> 79,751
<DEFERRED-ACQUISITION> 286,428
<TOTAL-ASSETS> 42,875,669
<POLICY-LOSSES> 29,898,561
<UNEARNED-PREMIUMS> 3,080,609
<POLICY-OTHER> 0
<POLICY-HOLDER-FUNDS> 0
<NOTES-PAYABLE> 0
0
7,331,440
<COMMON> 102,501
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 42,875,669
4,497,702
<INVESTMENT-INCOME> 297,733
<INVESTMENT-GAINS> (5,179)
<OTHER-INCOME> 0
<BENEFITS> 2,922,277
<UNDERWRITING-AMORTIZATION> 2,017,000
<UNDERWRITING-OTHER> 281,096
<INCOME-PRETAX> (430,117)
<INCOME-TAX> (146,000)
<INCOME-CONTINUING> (284,117)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (284,117)
<EPS-PRIMARY> (2.77)
<EPS-DILUTED> (2.77)
<RESERVE-OPEN> 31,982,392
<PROVISION-CURRENT> 2,922,277
<PROVISION-PRIOR> 0
<PAYMENTS-CURRENT> 487,000
<PAYMENTS-PRIOR> 4,267,000
<RESERVE-CLOSE> 29,898,561
<CUMULATIVE-DEFICIENCY> 0
</TABLE>
