8-K

UNITED STATES SECURITIES AND EXCHANGE
COMMISSION
Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 10, 2011

Tower Group, Inc.

(Exact name of registrant as specified in its charter)

Delaware	000-50990	13-3894120
(State or other jurisdiction of incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

120 Broadway, 31^st Floor
New York, NY 10271
(Address of principal executive offices)

(212) 655-2000
(Registrant’s telephone number, including area code)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Table of Contents

Item 7.01.	Regulation FD Disclosure
Item 8.01.	Other Events
Item 9.01.	Financial Statements and Exhibits

SIGNATURES

EXHIBIT INDEX

EX-99.1:	SCHEDULE OF ADJUSTED FINANCIAL INFORMATION
EX 99-2:	SCHEDULE OF ADJUSTED SEGMENT RESULTS OF OPERATIONS

Item 7.01 Regulation FD Disclosure

On Tuesday, May 10, 2011, Michael H. Lee, President and Chief Executive Officer of Tower Group, Inc. (“Tower”) and William E. Hitselberger, Executive Vice President and Chief Financial Officer of Tower gave a presentation to discuss first quarter 2011 financial results. In connection with the presentation, the Company provided a premium revenue projection ranging from $1.75 billion to $1.8 billion for the year ending December 31, 2011.

The information under this Item 7.01 shall be deemed to be “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

Item 8.01. Other Events

As previously disclosed, in October 2010, the Financial Accounting Standards Board issued new guidance concerning the accounting for costs associated with acquiring or renewing insurance contracts. This guidance generally follows the model of that for loan origination costs. Under the new guidance, only direct incremental costs associated with successful insurance contract acquisitions or renewals would be deferrable. The Company adopted this guidance retrospectively effective January 1, 2011 and has adjusted its previously issued financial information.

Exhibits 99.1 and 99.2 to this Current Report on Form 8-K, each of which is included herein, provide certain summarized financial results reflecting the adoption of the aforementioned accounting guidance.

Item 9.01 (d) Financial Statements and Exhibits

Exhibit No.	Description
99.1	Schedule of Adjusted Financial Information
99.2	Schedule of Adjusted Segment Results of Operations

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	Tower Group, Inc.
	Registrant
Date: May 11, 2011	/s/ William E. Hitselberger
	WILLIAM E. HITSELBERGER
	Executive Vice President & Chief Financial Officer

EXHIBIT INDEX

Number	Exhibits
99.1	Schedule of Adjusted Financial Information
99.2	Schedule of Adjusted Segment Results of Operations

EX-99.1

EXHIBIT 99.1

Tower Group, Inc.
Schedule of Adjusted Financial Information
Consolidated Balance Sheets

	December 31,			March 31,			June 30,			September 30,			December 31,
($ in thousands)	2009			2010			2010			2010			2010
Assets
Investments — Tower
Available-for-sale investments, at fair value:
Fixed-maturity securities	$	1,783,596		$	1,833,499		$	1,685,727		$	2,189,524		$	2,041,557
Equity securities		76,733			78,579			36,825			40,480			90,317
Short-term investments		36,500			6,699			—			26,902			1,560
Investments — Reciprocal Exchanges
Available-for-sale investments, at fair value:
Fixed-maturity securities		—			—			—			316,602			341,054
Total investments		1,896,829			1,918,777			1,722,552			2,573,508			2,474,488
Cash and cash equivalents		164,882			156,855			348,451			118,436			102,877
Investment income receivable		20,240			22,264			19,414			26,264			23,562
Premiums receivable		308,075			300,785			308,766			361,030			387,584
Reinsurance recoverable on paid losses		14,819			18,929			14,715			27,084			18,214
Reinsurance recoverable on unpaid losses		199,687			214,807			237,963			299,970			282,682
Prepaid reinsurance premiums		94,818			76,670			67,889			90,510			77,627
Deferred acquisition costs, net		126,689			124,096			128,939			164,713			164,123
Deferred income taxes		57,144			51,731			44,213			19,293			2,245
Intangible assets		53,350			52,018			50,686			114,808			123,820
Goodwill		244,690			243,748			243,748			249,404			250,103
Other assets		103,153			130,418			157,127			197,569			230,405
Total assets	$	3,284,376		$	3,311,098		$	3,344,463		$	4,242,589		$	4,137,730
Liabilities
Loss and loss adjustment expenses	$	1,131,989		$	1,195,840		$	1,188,375		$	1,632,361		$	1,610,421
Unearned premium		658,940			620,401			631,094			873,122			872,026
Reinsurance balances payable		89,080			46,273			48,661			57,176			35,037
Funds held under reinsurance agreements		13,737			60,242			69,269			78,358			93,153
Other liabilities		133,647			112,194			81,714			143,954			84,989
Debt		235,058			235,058			291,058			373,637			374,266
Total liabilities		2,262,451			2,270,008			2,310,171			3,158,608			3,069,892
Stockholders’ equity
Common stock		451			455			455			456			457
Treasury stock		(1,995	)		(10,636	)		(50,603	)		(87,303	)		(91,779	)
Paid-in-capital		751,878			754,265			755,992			759,598			763,064
Accumulated other comprehensive income		34,554			50,031			58,843			87,560			48,883
Retained earnings		237,037			246,975			269,605			292,873			324,376
Tower Group, Inc. stockholders’ equity		1,021,925			1,041,090			1,034,292			1,053,184			1,045,001
Noncontrolling interests — Reciprocal Exchanges		—			—			—			30,797			22,837
Total stockholders’ equity		1,021,925			1,041,090			1,034,292			1,083,981			1,067,838
Total liabilities and stockholders’ equity	$	3,284,376		$	3,311,098		$	3,344,463		$	4,242,589		$	4,137,730

Tower Group, Inc.
Schedule of Adjusted Financial Information
Consolidated Statements of Income

	Year ended			Three months ended												Year ended
	December 31,			March 31,			June 30,			September 30,			December 31,			December 31,
($ in thousands)	2009			2010			2010			2010			2010			2010
Revenues
Net premiums earned	$	854,711		$	268,046		$	272,967		$	378,779		$	372,877		$	1,292,669
Ceding commission revenue		43,937			10,188			8,453			10,916			8,511			38,068
Insurance services revenue		5,123			556			250			1,116			247			2,169
Policy billing fees		2,965			771			1,010			1,896			2,578			6,255
Net investment income		74,866			23,175			23,931			29,294			29,690			106,090
Net realized investment gains (losses):
Other-than-temporary impairments		(44,210	)		(6,146	)		(2,836	)		(4,953	)		(2,165	)		(16,100	)
Portion of loss recognized in other comprehensive income		20,722			3,215			2,505			4,400			1,789			11,909
Other net realized investment gains		24,989			3,671			5,497			2,270			6,236			17,674
Total net realized investment gains		1,501			740			5,166			1,717			5,860			13,483
Total revenues		983,103			303,476			311,777			423,718			419,763			1,458,734
Expenses
Loss and loss adjustment expenses		475,497			169,337			159,868			231,463			223,355			784,023
Direct and ceding commission expense		204,565			58,045			58,619			81,173			69,372			267,209
Other operating expenses		149,127			51,008			49,741			63,475			66,265			230,489
Acquisition-related transaction costs		14,038			857			393			148			971			2,369
Interest expense		18,122			4,881			5,214			6,192			8,307			24,594
Total expenses		861,349			284,128			273,835			382,451			368,270			1,308,684
Other income (expense)
Equity in income (loss) of unconsolidated affiliate		(777	)		—			—			—			—			—
Gain on investment in acquired unconsolidated affiliate		7,388			—			—			—			—			—
Gain on bargain purchase		13,186			—			—			—			—			—
Other		—			(466	)		—			—			—			(466	)
Income before income taxes		141,551			18,882			37,942			41,267			51,493			149,584
Income tax expense		44,753			5,830			12,300			14,109			18,134			50,373
Net income	$	96,798		$	13,052		$	25,642		$	27,158		$	33,359		$	99,211
Add: Net loss attributable to Reciprocal Exchanges		—			—			—			(1,405	)		(3,274	)		(4,679	)
Net income attributable to Tower Group, Inc.	$	96,798		$	13,052		$	25,642		$	28,563		$	36,633		$	103,890
Earnings per share attributable to Tower Group, Inc. stockholders:
Basic	$	2.46		$	0.29		$	0.58		$	0.67		$	0.88		$	2.39
Diluted	$	2.45		$	0.29		$	0.58		$	0.66		$	0.88		$	2.38
Weighted average common shares outstanding:
Basic		39,363			45,204			44,330			42,924			41,538			43,462
Diluted		39,581			45,406			44,515			43,098			41,715			43,648

EX-99.2

Exhibit 99.2

Tower Group, Inc.

Schedule of Adjusted Segment Results of Operations

Commercial Insurance & Personal Insurance Combined

	Year ended			Three-months ended												Year ended
	December 31,			March 31,			June 30,			September 30,			December 31,			December 31,
($ in millions)	2009			2010			2010			2010			2010			2010
Revenues
Premiums earned
Gross premiums earned	$	1,046,260		$	321,819		$	320,936		$	441,920		$	434,963		$	1,519,638
Less: ceded premiums earned		(191,549	)		(53,773	)		(47,970	)		(63,140	)		(62,086	)		(226,969	)
Net premiums earned		854,711			268,046			272,966			378,780			372,877			1,292,669
Ceded commission revenue		43,937			10,188			8,453			10,916			8,511			38,068
Policy billing fees		2,944			771			1,010			1,895			2,579			6,255
Total revenue		901,592			279,005			282,429			391,591			383,967			1,336,992
Expenses
Loss and loss adjustment expenses
Gross loss and loss adjustment expenses		566,762			196,950			190,279			265,767			231,424			884,420
Less: ceded loss and loss adjustment expenses		(91,265	)		(27,613	)		(30,412	)		(34,303	)		(8,069	)		(100,397	)
Net loss and loss adjustment expenses		475,497			169,337			159,867			231,464			223,355			784,023
Underwriting expenses
Direct commission expenses		202,858			57,923			58,551			81,050			68,572			266,096
Other underwriting expenses		142,749			50,003			48,788			66,832			73,797			239,420
Total underwriting expenses		345,607			107,926			107,339			147,882			142,369			505,516
Underwriting profit	$	80,488		$	1,742		$	15,223		$	12,245		$	18,243		$	47,453
Key Measures
Premiums written
Gross premiums written	$	1,070,716		$	283,249		$	331,662		$	447,600		$	433,860		$	1,496,371
Less: ceded premiums written		(184,527	)		(35,956	)		(39,220	)		(57,938	)		(49,193	)		(182,307	)
Net premiums written	$	886,189		$	247,293		$	292,442		$	389,662		$	384,667		$	1,314,064
Calendar Year Loss Ratio
Gross		54.2	%		61.2	%		59.3	%		60.1	%		53.2	%		58.2	%
Net		55.6	%		63.2	%		58.6	%		61.1	%		59.9	%		60.7	%
Underwriting Expense Ratios
Gross		32.8	%		33.3	%		33.1	%		33.0	%		32.1	%		32.9	%
Net		35.0	%		36.2	%		35.9	%		35.7	%		35.2	%		35.7	%
Combined Ratio
Gross		87.0	%		94.5	%		92.4	%		93.1	%		85.3	%		91.1	%
Net		90.6	%		99.4	%		94.5	%		96.8	%		95.1	%		96.4	%

Tower Group, Inc.
Schedule of Adjusted Segment Results of Operations
Commercial Insurance Segment Information

	Year ended			Three-months ended												Year ended
	December 31,			March 31,			June 30,			September 30,			December 31,			December 31,
($ in thousands)	2009			2010			2010			2010			2010			2010
Revenues
Premiums earned
Gross premiums earned	$	887,420		$	278,628		$	274,101		$	272,376		$	271,610		$	1,096,715
Less: ceded premiums earned		(149,203	)		(45,197	)		(43,958	)		(34,791	)		(31,754	)		(155,700	)
Net premiums earned		738,217			233,431			230,143			237,585			239,856			941,015
Ceded commission revenue		39,355			9,142			9,428			9,239			4,189			31,998
Policy billing fees		2,215			580			710			720			732			2,742
Total revenue		779,787			243,153			240,281			247,544			244,777			975,755
Expenses
Loss and loss adjustment expenses
Gross loss and loss adjustment expenses		486,894			162,590			174,919			172,909			164,633			675,051
Less: ceded loss and loss adjustment expenses		(80,166	)		(26,830	)		(29,151	)		(24,542	)		(5,206	)		(85,729	)
Net loss and loss adjustment expenses		406,728			135,760			145,768			148,367			159,427			589,322
Underwriting expenses
Direct commission expenses		174,105			50,005			50,711			52,585			38,050			191,351
Other underwriting expenses		114,825			40,864			41,501			40,124			32,659			155,148
Total underwriting expenses		288,930			90,869			92,212			92,709			70,709			346,499
Underwriting profit	$	84,129		$	16,524		$	2,301		$	6,468		$	14,641		$	39,934
Key Measures
Premiums written
Gross premiums written	$	884,676		$	247,512		$	279,767		$	279,146		$	277,407		$	1,083,832
Less: ceded premiums written		(153,814	)		(28,075	)		(34,882	)		(25,951	)		(7,662	)		(96,570	)
Net premiums written	$	730,862		$	219,437		$	244,885		$	253,195		$	269,745		$	987,262
Calendar Year Loss Ratio
Gross		54.9	%		58.4	%		63.8	%		63.5	%		60.6	%		61.6	%
Net		55.1	%		58.2	%		63.3	%		62.4	%		66.5	%		62.6	%
Underwriting Expense Ratios
Gross		32.3	%		32.4	%		33.4	%		33.8	%		25.8	%		31.3	%
Net		33.5	%		34.8	%		35.7	%		34.8	%		27.4	%		33.1	%
Combined Ratio
Gross		87.2	%		90.8	%		97.2	%		97.3	%		86.4	%		92.9	%
Net		88.6	%		93.0	%		99.0	%		97.3	%		93.9	%		95.8	%

Tower Group, Inc.
Schedule of Adjusted Segment Results of Operations
Personal Insurance Segment Information

	Year Ended			Year ended December 31, 2010
	December 31,						Reciprocal
($ in thousands)	2009			Tower			Exchanges			Total
Revenues
Premiums earned
Gross premiums earned	$	158,840		$	308,925		$	113,998		$	422,923
Less: ceded premiums earned		(42,346	)		(51,062	)		(20,207	)		(71,269	)
Net premiums earned		116,494			257,863			93,791			351,654
Ceded commission revenue		4,582			4,019			2,051			6,070
Policy billing fees		729			3,213			300			3,513
Total revenue		121,805			265,095			96,142			361,237
Expenses
Loss and loss adjustment expenses
Gross loss and loss adjustment expenses		79,868			140,537			68,832			209,369
Less: ceded loss and loss adjustment expenses		(11,099	)		(8,038	)		(6,630	)		(14,668	)
Net loss and loss adjustment expenses		68,769			132,499			62,202			194,701
Underwriting expenses
Direct commission expenses		28,753			56,392			18,353			74,745
Other underwriting expenses		27,924			59,980			24,292			84,272
Total underwriting expenses		56,677			116,372			42,645			159,017
Underwriting profit	$	(3,641	)	$	16,224		$	(8,705	)	$	7,519
Key Measures
Premiums written
Gross premiums written	$	186,040		$	285,742		$	126,797		$	412,539
Less: ceded premiums written		(30,713	)		(62,112	)		(23,623	)		(85,735	)
Net premiums written	$	155,327		$	223,630		$	103,174		$	326,804
Calendar Year Loss Ratio
Gross		50.3	%		45.5	%		60.4	%		49.5	%
Net		59.0	%		51.4	%		66.3	%		55.4	%
Underwriting Expense Ratios
Gross		35.2	%		36.6	%		37.1	%		36.8	%
Net		44.1	%		42.3	%		43.0	%		42.5	%
Combined Ratio
Gross		85.5	%		82.1	%		97.5	%		86.3	%
Net		103.1	%		93.7	%		109.3	%		97.9	%

Tower Group, Inc.
Schedule of Adjusted Segment Results of Operations
Personal Insurance Segment Information

							Three-months ended									Three-months ended
	Three-months ended						September 30, 2010									December 31, 2010
	March 31.			June 30,						Reciprocal									Reciprocal
($ in thousands)	2010			2010			Tower			Exchanges			Total			Tower			Exchanges			Total
Revenues
Premiums earned
Gross premiums earned	$	43,191		$	46,835		$	113,590		$	55,954		$	169,544		$	105,309		$	58,044		$	163,353
Less: ceded premiums earned		(8,576	)		(4,012	)		(18,408	)		(9,941	)		(28,349	)		(20,066	)		(10,266	)		(30,332	)
Net premiums earned		34,615			42,823			95,182			46,013			141,195			85,243			47,778			133,021
Ceded commission revenue		1,046			(975	)		651			1,026			1,677			3,297			1,025			4,322
Policy billing fees		191			300			1,024			151			1,175			1,698			149			1,847
Total revenue		35,852			42,148			96,857			47,190			144,047			90,238			48,952			139,190
Expenses
Loss and loss adjustment expenses
Gross loss and loss adjustment expenses		34,360			15,360			51,899			40,959			92,858			38,918			27,873			66,791
Less: ceded loss and loss adjustment expenses		(783	)		(1,261	)		(3,452	)		(6,309	)		(9,761	)		(2,542	)		(321	)		(2,863	)
Net loss and loss adjustment expenses		33,577			14,099			48,447			34,650			83,097			36,376			27,552			63,928
Underwriting expenses
Direct commission expenses		7,918			7,840			20,162			8,303			28,465			20,472			10,050			30,522
Other underwriting expenses		9,139			7,287			18,985			7,723			26,708			24,569			16,569			41,138
Total underwriting expenses		17,057			15,127			39,147			16,026			55,173			45,041			26,619			71,660
Underwriting profit	$	(14,782	)	$	12,922		$	9,263		$	(3,486	)	$	5,777		$	8,821		$	(5,219	)	$	3,602
Key Measures
Premiums written
Gross premiums written	$	35,737		$	51,895		$	112,237		$	56,217		$	168,454		$	85,873		$	70,580		$	156,453
Less: ceded premiums written		(7,881	)		(4,338	)		(19,265	)		(12,722	)		(31,987	)		(30,628	)		(10,901	)		(41,529	)
Net premiums written	$	27,856		$	47,557		$	92,972		$	43,495		$	136,467		$	55,245		$	59,679		$	114,924
Calendar Year Loss Ratio
Gross		79.6	%		32.8	%		45.7	%		73.2	%		54.8	%		37.0	%		48.0	%		40.9	%
Net		97.0	%		32.9	%		50.9	%		75.3	%		58.9	%		42.7	%		57.7	%		48.1	%
Underwriting Expense Ratios
Gross		39.0	%		31.7	%		33.6	%		28.4	%		31.8	%		41.2	%		45.6	%		42.7	%
Net		45.7	%		36.9	%		39.4	%		32.3	%		37.1	%		47.0	%		53.3	%		49.2	%
Combined Ratio
Gross		118.6	%		64.5	%		79.3	%		101.6	%		86.6	%		78.1	%		93.6	%		83.6	%
Net		142.7	%		69.8	%		90.3	%		107.6	%		95.9	%		89.7	%		110.9	%		97.3	%