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, 2010

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 FloorNew 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):

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

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

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

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

Item 2.02.   RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

       The following information, including the Exhibit to this Form 8-K, is being furnished pursuant to Item 2.02, “Results of Operations and Financial Condition,” on Form 8-K, and shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act.

       On May 10, 2010, Tower Group, Inc. issued a press release announcing its results of operations for the first quarter ended March 31, 2010. A copy of the press release is attached as Exhibit 99.1 to this Form 8-K and is incorporated by reference to this Item 2.02 as if fully set forth herein.

Item 9.01.   FINANCIAL STATEMENTS AND EXHIBITS.
The following exhibits are filed as part of this report.
Number	Description
99.1	Copy of press release issued by Tower Group, Inc. dated May 10, 2010

SIGNATURES

Pursuant to the requirement of the Securities Exchange Act of 1934, as amended, 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 10, 2010	/s/ William E. Hitselberger
		WILLIAM E. HITSELBERGER
		Chief Financial Officer and Senior Vice President

EX-99.1

Exhibit 99.1

Tower Group, Inc. Reports First Quarter 2010 Results

NEW YORK--(BUSINESS WIRE)--May 10, 2010--Tower Group, Inc. (NASDAQ: TWGP) today reported net income of $17.5 million and diluted earnings per share of $0.38 for the first quarter 2010. Operating income ⁽¹⁾ and operating earnings per share⁽¹⁾ were $17.8 million and $0.39 respectively for the first quarter of 2010. After-tax catastrophe storm losses amounted to $12.0 million or $0.27 per share. The storm losses added 6.5 points to the first quarter 2010 loss ratio for the combined segments.

Key Highlights (all percentage increases compare the first quarter 2010 results to the results for the same period in 2009 except as noted otherwise):

• Gross premiums written and produced ⁽²⁾ increased by 34.4% to $283.9 million due to significant contributions from acquired companies.
• For the combined segments, the net combined ratio was 96.8% (including catastrophe losses) compared with 86.7% for the same period last year.

- For the combined segments, the net loss ratio was 63.2% which reflects the storm losses compared with 53.7% for the same period last year. Tower had no catastrophe losses in the first quarter of 2009.

- For the combined segments, the net expense ratio was 33.6% compared with 33.0% for the same period last year.

• Net investment income increased by 59.5% to $23.2 million.
• Book value per share was $23.88 and stockholders’ equity was $1.1 billion as of March 31, 2010.
• Agreement to purchase the Personal Lines Division of OneBeacon announced during the first quarter.

Michael H. Lee, President and Chief Executive Officer of Tower Group, Inc., stated, “During the quarter, we experienced the worst storm losses in our twenty year history. Despite these storm losses, we were able to achieve profitable underwriting results by successfully executing on our plan to diversify our business and to consolidate renewal business through acquisitions. As a result, we achieved strong top line growth while maintaining underwriting and pricing discipline. In addition, with the OneBeacon Personal Lines acquisition, which we expect to close at the end of the second quarter, we will be able to significantly expand our personal lines division, further diversify our business model and profitably grow our business.”

Financial Summary ($ in thousands, except per share data):
			Three Months Ended
			March 31,
			2010			2009
Gross premiums written		$	283,084		$	199,944
Premiums produced by managing general agency			821			10,729
Net premiums written			247,134			186,264
Total commission and fee income			11,515			18,371
Net investment income			23,175			14,533
Net realized investment gains (losses)			740			(672	)
Total revenues			303,476			200,322
Gain on investment in acquired unconsolidated affiliate			-			7,388
Other expense			(466	)		-
Net income			17,472			17,976
Earnings per share—Basic		$	0.39		$	0.53
Earnings per share—Diluted		$	0.38		$	0.53
Return on average equity			7.5	%		17.3	%
Combined Brokerage and Specialty Segments
Net premiums earned			268,046			168,090
Net loss ratio			63.2	%		53.7	%
Net expense ratio			33.6	%		33.0	%
Brokerage Insurance Segment
Net premiums earned			189,427			145,696
Net loss ratio			62.8	%		52.2	%
Net expense ratio			35.3	%		32.9	%
Specialty Business Segment
Net premiums earned			78,619			22,394
Net loss ratio			64.1	%		63.1	%
Net expense ratio			29.6	%		33.8	%
Reconciliation of non-GAAP financial measures:
	Net income	$	17,472		$	17,976
	Net realized gains (losses) on investments, net of tax		481			(437	)
	Acquisition-related transaction costs, net of tax (3)		(794	)		(9,924	)
	Operating income	$	17,785		$	28,337
Operating EPS and ROE:
	Earnings per share—Basic	$	0.39		$	0.84
	Earnings per share—Diluted	$	0.39		$	0.84
	Return on average equity		7.6	%		27.3	%

First Quarter 2010 Highlights

Gross premiums written increased to $283.1 million in the first quarter of 2010, which was 41.6% higher than in the first quarter of 2009. Excluding Specialty Underwriters’ Alliance business, policies in-force for our brokerage business increased by 14.5% as of March 31, 2010 compared to March 31, 2009. During the same period, premiums on renewed Brokerage Insurance segment business increased 3.1% and 0.3%, respectively, in personal and commercial lines, resulting in an overall premium increase on renewal business of 1.3%. For the Brokerage Insurance segment, the retention rate was 90% in personal lines and 80% in commercial lines, resulting in an overall retention rate of 86%.

Total revenues increased 51.5% to $303.5 million in the first quarter of 2010 as compared to $200.3 million in the prior year's first quarter. Net premiums earned represented 88.3% of total revenues for the three months ended March 31, 2010 compared to 83.9% for the same period in 2009.

Total commission and fee income decreased 37.3% to $11.5 million in the first quarter of 2010 compared to $18.4 million in the first quarter of 2009.

Net investment income increased 59.5% to $23.2 million for the three months ended March 31, 2010 compared to $14.5 million for the same period in 2009. On a tax equivalent basis, the book yield was 5.7% as of March 31, 2010 compared to 5.5% as of March 31, 2009. Net realized investment gains were $0.7 million for the three months ended March 31, 2010 compared to a loss of $0.7 million in the same period last year. The first quarter gains include other-than-temporarily impaired losses of $2.9 million as compared to $3.2 million of such losses in the first quarter of 2009.

Gross loss and loss adjustment expenses and the gross loss ratio for the three months ended March 31, 2010 were $197.0 million and 61.2%, respectively, compared to $129.4 million and 59.9%, respectively, in the same period in 2009. The net loss ratio was 63.2% in the three months ended March 31, 2010 and 53.7% in the same period in 2009. The first quarter 2010 loss and loss adjustment expenses include $17.5 million of pre-tax losses ($12.0 million after-tax) caused by the March Northeast U.S. storm.

Operating expenses were $102.3 million for the three months ended March 31, 2010 as compared to $74.2 million for the same period in 2009. Our gross expense ratio was 31.2% for the three months ended March 31, 2010 as compared to 32.0% in the same period in 2009. Our net expense ratio was 33.6% for the three months ended March 31, 2010 as compared to 33.0% in the same period in 2009.

Additional Highlights and Disclosures:

Stock Repurchase

As part of Tower’s capital management strategy, the Board of Directors approved a $100 million share repurchase program on February 26, 2010. During the first quarter of 2010, 337,782 shares of common stock were purchased for an aggregate consideration of $7.4 million.

Dividend Declaration

Tower’s Board of Directors approved a quarterly dividend on April 27, 2010 of $0.07 per share payable on June 25, 2010 to stockholders of record as of June 14, 2010.

2010 Guidance

Tower expects second quarter 2010 operating earnings per share to be in a range of $0.55 to $0.60. For the full year 2010, Tower projects its operating earnings per share to be in a range between $2.60 and $2.70. We have revised our earnings guidance for 2010 to reflect the effect of reported catastrophe losses in the first quarter and the closing of the OneBeacon Personal Lines Division transaction, which is now expected to close at the end of the second quarter of 2010.

Notes on Non-GAAP Financial Measures

(1) Operating income excludes realized gains and losses and acquisition-related transaction costs, net of tax. This is a common measurement for property and casualty insurance companies. We believe this presentation enhances the understanding of our results of operations by highlighting the underlying profitability of our insurance business. Additionally, these measures are a key internal management performance standard. Operating earnings per share is operating income divided by diluted weighted average shares outstanding. Operating return on equity is annualized operating income divided by average common stockholders’ equity.

(2) Gross premiums written through our insurance subsidiaries and produced as managing general agent on behalf of other insurance companies.

(3) For the three month periods ended March 31, 2010 and March 31, 2009, $0.7 million and $7.3 million, respectively, of acquisition-related transaction costs were not deemed deductible for tax purposes. A tax rate of 35% was used for those acquisition-related transaction costs that were tax deductible.

Conference Call

Tower will host a conference call and webcast to discuss these results today at 10:00 a.m. ET. This conference call will be broadcast live over the Internet. To access a listen-only webcast over the Internet, please visit the Investor Information section of Tower Group, Inc.’s website, www.twrgrp.com, or use this link: http://investor.twrgrp.com/events.cfm

Please access the website at least 15 minutes prior to the call to register and to download any necessary audio software. If you are unable to participate during the live conference call, a webcast will be archived in the Investor Information section of Tower Group, Inc.'s website at www.twrgrp.com.

About Tower Group, Inc.

Tower Group, Inc. offers diversified property and casualty insurance products and services through its operating subsidiaries. Its insurance company subsidiaries offer insurance products to individuals and small to medium-sized businesses through its network of retail and wholesale agents and specialty business through program underwriting agents. Tower's insurance services subsidiaries provide underwriting, claims and reinsurance brokerage services to other insurance companies.

Cautionary Note Regarding Forward-Looking Statements

The Private Securities Litigation Reform Act of 1995 provides a "safe harbor" for forward-looking statements. This press release and any other written or oral statements made by or on behalf of Tower may include forward-looking statements that reflect Tower's current views with respect to future events and financial performance. All statements other than statements of historical fact included in this press release are forward-looking statements. Forward-looking statements can generally be identified by the use of forward-looking terminology such as "may," "will," "plan," "expect," "project," "intend," "estimate," "anticipate," "believe" and "continue" or their negative or variations or similar terminology. All forward-looking statements address matters that involve risks and uncertainties. Accordingly, there are or will be important factors that could cause the actual results of Tower to differ materially from those indicated in these statements. Please refer to Tower’s filings with the SEC, including among others Tower’s Annual Report on Form 10-K for the year ended December 31, 2009, for a description of the important factors that could cause the actual results of Tower to differ materially from those indicated in these statements. Forward-looking statements speak only as of the date on which they are made, and Tower undertakes no obligation to update publicly or revise any forward-looking statement, whether as a result of new information, future developments or otherwise.

For more information visit Tower's website at http://www.twrgrp.com/

Brokerage Insurance & Specialty Business Combined
($ in thousands)
(Unaudited)
				Three Months Ended March 31,
				2010			2009		Change(%)
Revenues
Premiums earned
	Gross premiums earned		$	321,819		$	216,058		49.0	%
	Less: ceded premiums earned			(53,773	)		(47,968	)	12.1	%
	Net premiums earned			268,046			168,090		59.5	%
Ceding commission revenue				10,188			13,574		-25.0	%
Policy billing fees				771			532		44.9	%
Total				279,005			182,196		53.1	%
Expenses
Loss and loss adjustment expenses
	Gross loss and loss adjustment expenses			196,949			129,439		52.2	%
	Less: ceded loss and loss adjustment
		expenses		(27,613	)		(39,182	)	-29.5	%
	Net loss and loss adjustment expenses			169,337			90,256		87.6	%
Underwriting expenses
	Direct commission expense			57,940			44,982		28.8	%
	Other underwriting expenses			43,185			24,632		75.3	%
	Total underwriting expenses			101,125			69,614		45.3	%
Underwriting profit			$	8,543		$	22,326		-61.7	%
Key Measures
Premiums written
	Gross premiums written		$	283,084		$	199,944		41.6	%
	Less: ceded premiums written			(35,950	)		(13,680	)	162.8	%
	Net premiums written		$	247,134		$	186,264		32.7	%
Loss Ratios
	Gross			61.2	%		59.9	%
	Net			63.2	%		53.7	%
Accident Year Loss Ratios
	Gross			60.7	%		55.5	%
	Net			63.2	%		57.8	%
Underwriting Expense Ratios
	Gross			31.2	%		32.0	%
	Net			33.6	%		33.0	%
Combined Ratios
	Gross			92.4	%		91.9	%
	Net			96.8	%		86.7	%

Brokerage Insurance Segment Information
($ in thousands)
(Unaudited)
				Three Months Ended
				March 31,
				2010			2009
Revenues
Premiums earned
	Gross premiums earned		$	237,223		$	189,914
	Less: ceded premiums earned			(47,796	)		(44,218	)
	Net premiums earned			189,427			145,696
Ceding commission revenue				8,410			13,112
Policy billing fees				771			532
Total				198,608			159,340
Expenses
Loss and loss adjustment expenses
	Gross loss and loss adjustment expenses			141,185			113,547
	Less: ceded loss and loss adjustment
		expenses		(22,229	)		(37,430	)
	Net loss and loss adjustment expenses			118,956			76,117
Underwriting expenses
	Direct commission expenses			40,671			38,184
	Other underwriting expenses			35,441			23,392
	Total underwriting expenses			76,112			61,576
Underwriting profit			$	3,540		$	21,647
Key Measures
Premiums written
	Gross premiums written		$	212,737		$	170,866
	Less: ceded premiums written			(30,636	)		(12,656	)
	Net premiums written		$	182,101		$	158,210
Loss Ratios
	Gross			59.5	%		59.8	%
	Net			62.8	%		52.2	%
Accident Year Loss Ratios
	Gross			58.9	%		54.8	%
	Net			62.8	%		57.0	%
Underwriting Expense Ratios
	Gross			31.8	%		32.1	%
	Net			35.3	%		32.9	%
Combined Ratios
	Gross			91.3	%		91.9	%
	Net			98.1	%		85.1	%

Specialty Business Segment Information
($ in thousands)
(Unaudited)
		Three Months Ended
		Ended March 31,
		2010			2009
Revenues
Premiums earned
Gross premiums earned	$	84,596		$	26,144
Less: ceded premiums earned		(5,977	)		(3,750	)
Net premiums earned		78,619			22,394
Ceding commission revenue		1,778			466
Total		80,397			22,860
Expenses
Loss and loss adjustment expenses
Gross loss and loss adjustment expenses		55,765			15,892
Less: ceded loss and loss adjustment expenses		(5,384	)		(1,752	)
Net loss and loss adjustment expenses		50,381			14,140
Underwriting expenses
Direct commission expense		17,270			6,798
Other underwriting expenses		7,744			1,240
Total underwriting expenses		25,014			8,038
Underwriting profit	$	5,002		$	682
Key Measures
Premiums written
Gross premiums written	$	70,348		$	29,078
Less: ceded premiums written		(5,315	)		(1,024	)
Net premiums written	$	65,033		$	28,054
Loss Ratios
Gross		65.9	%		60.8	%
Net		64.1	%		63.1	%
Accident Year Loss Ratios
Gross		65.9	%		60.8	%
Net		64.2	%		63.1	%
Underwriting Expense Ratios
Gross		29.6	%		30.7	%
Net		29.6	%		33.8	%
Combined Ratios
Gross		95.5	%		91.5	%
Net		93.7	%		96.9	%

Insurance Services Segment Results of Operations
($ in thousands)
(Unaudited)
		Three Months Ended
		March 31,
		2010			2009
Revenue
Direct commission revenue from managing general agent	$	(52	)	$	3,107
Claims administration revenue		174			846
Other administration revenue		102			195
Reinsurance intermediary fees		332			94
Policy billing fees		-			19
Total revenue		556			4,261
Expenses
Direct commission expenses paid to producers		122			1,491
Other insurance services expenses		247			859
Claims expense reimbursement to TICNY		3			846
Total		372			3,196
Insurance services pre-tax income	$	184		$	1,065
Premiums produced by TRM on behalf
of issuing companies	$	821		$	10,729

Tower Group, Inc.
Consolidated Balance Sheets
(Unaudited)
		March 31,			December 31,
($ in thousands, except par value and share amounts)		2010			2009
Assets
Fixed-maturity securities, available-for-sale, at fair value (amortized cost of
	$1,756,831 and $1,729,117)	$	1,833,499		$	1,783,596
Equity securities, available-for-sale, at fair value (cost of $78,275 and $78,051)			78,579			76,733
Short-term investments, available-for-sale, at fair value (cost of $6,699 and $36,500)			6,699			36,500
Total investments			1,918,777			1,896,829
Cash and cash equivalents			156,855			164,882
Investment income receivable			22,264			20,240
Premiums receivable			300,785			308,075
Reinsurance recoverable on unpaid losses			18,929			14,819
Reinsurance recoverable on paid losses			214,807			199,687
Prepaid reinsurance premiums			76,670			94,818
Deferred acquisition costs, net of deferred ceding commission revenue			174,859			170,652
Deferred income taxes			33,964			41,757
Intangible assets			52,018			53,350
Goodwill			243,748			244,690
Fixed assets, net of accumulated depreciation			71,405			66,429
Other assets			59,013			36,724
Total assets		$	3,344,094		$	3,312,952
Liabilities
Loss and loss adjustment expenses		$	1,195,840		$	1,131,989
Unearned premium			620,401		$	658,940
Reinsurance balances payable			46,273			89,080
Funds held under reinsurance agreements			60,242			13,737
Accounts payable, accrued liabilities and other liabilities			112,194			133,647
Subordinated debentures			235,058			235,058
Total liabilities			2,270,008			2,262,451
Stockholders' equity
Common stock ($0.01 par value; 100,000,000 shares authorized, 45,480,876 and
	45,092,321 shares issued, and 44,973,701 and 44,984,953 shares outstanding)		455			451
Treasury stock (507,175 and 107,368 shares)			(10,636	)		(1,995	)
Paid-in-capital			754,265			751,878
Accumulated other comprehensive income			50,031			34,554
Retained earnings			279,971			265,613
Total stockholders' equity			1,074,086			1,050,501
Total liabilities and stockholders' equity		$	3,344,094		$	3,312,952

Tower Group, Inc.
Consolidated Statements of Income and Comprehensive Income
(Unaudited)
				Three Months Ended
				March 31,
($ in thousands, except per share and share amounts)				2010				2009
Revenues
Net premiums earned			$	268,046			$	168,090
Ceding commission revenue				10,188				13,574
Insurance services revenue				556				4,276
Policy billing fees				771				521
Net investment income				23,175				14,533
Net realized investment gains (losses)
	Other-than-temporary impairments			(6,146	)			(8,732	)
	Portion of loss recognized in other comprehensive income			3,215				5,506
	Other net realized investment gains			3,671				2,554
		Total net realized investment gains (losses)		740				(672	)
	Total revenues			303,476				200,322
Expenses
Loss and loss adjustment expenses				169,337				90,256
Direct and ceding commission expense				58,045				47,408
Other operating expenses				44,208				26,744
Acquisition-related transaction costs				857				11,348
Interest expense				4,881				3,783
	Total expenses			277,328				179,539
Other Income (expense)
Equity in loss of unconsolidated affiliate				-				(777	)
Gain on investment in acquired unconsolidated affiliate				-				7,388
Other expense				(466	)			-
Income before income taxes				25,682				27,394
Income tax expense				8,210				9,418
Net income			$	17,472		$		17,976
Gross unrealized investment holding gains arising during periods				23,811				5,067
Cumulative effect of adjustment resulting from adoption of
	new accounting guidance			-				(2,497	)
Equity in net unrealized gains on investment in
	unconsolidated affiliate's investment portfolio			-				3,124
Less: reclassification adjustment for (gains) losses included in net
	income			(740	)			672
Income tax (expense) related to items of other
	comprehensive income			(7,594	)			(2,228	)
Comprehensive net income			$	32,949			$	22,114
Basic and diluted earnings per share
	Basic		$	0.39			$	0.53
	Diluted		$	0.38			$	0.53
Weighted average common shares outstanding
	Basic			45,204,427				33,766,141
	Diluted			45,406,284				33,918,069
Dividends declared and paid per common share			$	0.07			$	0.05

CONTACT:
Tower Group, Inc.
Thomas Song, 212-655-4789
Managing Vice President
tsong@twrgrp.com