-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, V6O+S4PMTonJdiCoRbXolisN9FxGa+NoV6vjUMXyzrfVpP2IN+9WH1c+OGIsITrp gz/QFBTeKRy9gQnNF7wL5A== 0000780118-00-000009.txt : 20000522 0000780118-00-000009.hdr.sgml : 20000522 ACCESSION NUMBER: 0000780118-00-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000331 FILED AS OF DATE: 20000519 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMWEST INSURANCE GROUP INC CENTRAL INDEX KEY: 0000780118 STANDARD INDUSTRIAL CLASSIFICATION: SURETY INSURANCE [6351] IRS NUMBER: 952672141 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 001-09580 FILM NUMBER: 640026 BUSINESS ADDRESS: STREET 1: 5230 LAS VIRGENES RD CITY: CALABASAS STATE: CA ZIP: 91302 BUSINESS PHONE: 8188712000 MAIL ADDRESS: STREET 1: 5230 LAS VIRGENES RD CITY: CALABASAS STATE: CA ZIP: 91302 10-Q 1 FORM 10Q QUARTERLY FILING FOR AIG UNITED STATES 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 March 31, 2000 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ____ to ____ Commission file number: 1-9580 AMWEST INSURANCE GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 95-2672141 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 5230 Las Virgenes Road Calabasas, California 91302 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code: (818) 871-2000 --------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) 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 . As of May 15, 2000, 4,335,754 shares of common stock, $.01 par value, were outstanding. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES INDEX Part I. FINANCIAL INFORMATION: Item 1 Consolidated Statements of Operations and Comprehensive Income for the three months ended March 31, 2000 and 1999 (unaudited) 3 Consolidated Balance Sheets as of March 31, 2000 (unaudited) and December 31, 1999 4 Consolidated Statements of Cash Flows for the three months ended March 31, 2000 and 1999 (unaudited) 6 Notes to Interim Consolidated Financial Statements 8 Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Item 3 Quantitative and Qualitative Disclosures about Market Risk No significant changes from the Company's Annual Report on Form 10-K for the year ended December 31, 1999 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 PART I - FINANCIAL INFORMATION Item 1 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) (In thousands, except per share data)
Three months ended March 31, 2000 1999 --------- --------- OPERATIONS Gross written premiums $ 36,673 $ 32,135 Net premiums earned 30,737 26,993 Net investment income 1,877 1,769 Net realized investment gains 1,154 740 Commissions and fees 843 742 --------------------- --------------------- Total revenues 34,611 30,244 Net losses and loss adjustment expenses 13,548 9,086 Policy acquisition costs 15,253 13,322 General operating costs 4,053 3,939 Interest expense 620 554 --------------------- --------------------- Total expenses 33,474 26,901 Income before income taxes 1,137 3,343 Provision for income taxes 334 977 --------------------- --------------------- Net income $ 803 $ 2,366 ===================== ===================== Earnings per common share: Basic $ 0.19 $ 0.55 ===================== ===================== Diluted $ 0.19 $ 0.55 ===================== ===================== COMPREHENSIVE INCOME (LOSS) Net income $ 803 $ 2,366 Other comprehensive income (loss): Unrealized gains (losses) on securities, net of income taxes of $195 and $407 for the three months ended March 31,2000 and 1999, respectively (378) (791) Reclassification adjustment for gains included in net income, net of income taxes of $297 and $188 for the three months ended March 31, 2000 and 1999, respectively (578) (364) --------------------- --------------------- Comprehensive income (loss) $ (153) $ 1,211 ===================== ===================== See accompanying notes to interim consolidated financial statements.
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Dollars in thousands) ASSETS
March 31, December 31, 2000 1999 --------------------- --------------------- (unaudited) Investments, available-for-sale: Fixedmaturities, at market value (amortized cost of $99,761 and $104,193 at March 31, 2000 and December 31, 1999, respectively) $95,781 $100,892 Common equity securities, at market value (cost of $3,852 and $2,886 at March 31, 2000 and December 31, 1999, respectively) 5,006 4,199 Preferred equity securities, at market value (cost of $4,445 and $4,905 at March 31, 2000 and December 31, 1999, respectively) 3,861 5,073 Other invested assets (cost of $7,805 and $7,725 at March 31, 2000 and December 31, 1999, respectively) 7,970 7,749 Short-term investments 2,767 2,691 --------------------- --------------------- Total investments 115,385 120,604 Cash and cash equivalents 7,042 15,821 Accrued investment income 1,650 1,654 Agents balances and premiums receivable (less allowance for doubtful accounts of $1,260 at March 31, 2000 and December 31, 1999, respectively) 17,873 15,365 Contract settlement funds and collateral receivable 15,004 16,270 Reinsurance recoverable: Paid loss and loss adjustment expenses 3,432 5,401 Unpaid loss and loss adjustment expenses 26,904 21,903 Ceded unearned premiums 3,959 6,747 Deferred policy acquisition costs 25,150 22,147 Furniture, equipment and improvements, net 5,399 5,635 Current Federal income taxes 810 1,472 Other assets 10,560 8,676 --------------------- --------------------- Total assets $233,168 $241,695 ===================== =====================
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (Dollars in thousands) LIABILITIES AND STOCKHOLDERS' EQUITY
March 31, December 31, 2000 1999 --------------------- --------------------- (unaudited) Liabilities: Unpaid losses and loss adjustment expenses $ 54,826 $ 56,466 Unearned premiums 53,762 51,736 Funds held 46,722 50,271 Deferred Federal income taxes 739 494 Bank indebtedness 14,500 14,500 Amounts due to reinsurers (3,236) 2,181 Other liabilities 9,176 9,245 --------------------- --------------------- Total liabilities 176,489 184,893 Stockholders' equity: Preferred stock, $.01 par value, 1,000,000 Shares authorized; issued and outstanding: none - - Common stock, $.01 par value, 10,000,000 Shares authorized, issued and outstanding: 4,333,093 at March 31, 2000 and 4,328,592 at December 31, 1999 43 43 Additional paid-in capital 19,754 19,724 Accumulated other comprehensive income (2,142) (1,186) Retained earnings 39,024 38,221 --------------------- --------------------- Total stockholders' equity 56,679 56,802 --------------------- --------------------- Total liabilities and stockholders' equity $233,168 $241,695 ===================== =====================
See accompanying notes to interim consolidated financial statements. AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) (Dollars in thousands)
Three months ended March 31, 2000 1999 ------------ ------------ Cash flows from operating activities: Net income $ 803 $ 2,366 Adjustments to reconcile net income to cash provided by operating activities: Change in agents' balances and premiums receivable and unearned premiums (482) (3,078) Change in accrued investment income 4 (145) Change in unpaid losses and loss adjustment expenses (1,640) (3,202) Change in reinsurance recoverable on paid and unpaid losses and loss adjustment expenses and ceded unearned premiums (244) (3,087) Change in amounts due to reinsurers (5,417) 2,188 Change in other assets and other liabilities (685) (1,024) Change in income taxes, net 1,399 1,001 Change in deferred policy acquisition costs (3,003) (501) Net realized (gain) on sale of investments (1,155) (740) Net realized (gain) loss on sale of fixed assets 5 (4) Provision for depreciation and amortization 460 493 --------------------- --------------------- Net cash (used) by operating activities (9,955) (5,733) Cash flows from investing activities: Cash received from investments sold prior to maturity 1,518 2,761 Cash received from investments matured or called 11,277 14,929 Cash paid for investments acquired (7,869) (17,021) Amortization of discount on bonds (1) 43 Capital expenditures, net (230) (655) Acquisition of agencies, net - 259 --------------------- --------------------- Net cash provided by investing activities 4,695 316 (continued) Cash flows from financing activities: Proceeds from issuance of common stock 30 358 Change in funds held (3,549) 7,298 Dividends paid - (388) --------------------- --------------------- Net cash provided (used) by financing activities (3,519) 7,268 --------------------- --------------------- Net increase (decrease) in cash and cash equivalents (8,779) 1,851 Cash and cash equivalents at beginning of period 15,821 2,431 --------------------- --------------------- Cash and cash equivalents at end of period $ 7,042 $ 4,282 ===================== ===================== Supplemental disclosures of cash flow information: Cash paid during the period for: Interest $ 620 $ 554 Income taxes 2 1 See accompanying notes to interim consolidated financial statements.
AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Notes to Interim Consolidated Financial Statements (unaudited) (1) Basis of Presentation The interim consolidated financial statements presented herein are unaudited and, in the opinion of management, reflect all adjustments necessary for a fair presentation of results for such periods. All such adjustments are of a normal, recurring nature. The results of operations for any interim period are not necessarily indicative of results for the full year. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto contained in the Company's Annual Report on Form 10-K for the year ended December 31, 1999. (2) Bank Covenant The Company has entered into a revolving credit agreement, as amended, with Union Bank for $15,000,000. At March 31, 2000, $14,500,000 of the $15,000,000 line is currently utilized leaving $500,000 currently available. The bank loan has a variable rate of interest based upon fluctuations in the London Interbank Offered Rate (LIBOR) and has amortizing principal payments. The first installment is due September 30, 2001. The interest rate at March 31, 2000 was 7.7%. The credit agreement contains certain financial covenants with respect to capital expenditures, business acquisitions, liquidity ratio, leverage ratio, tangible net worth, net profit and dividend payments. The Company is currently in violation of Section 5.13 of the revolving credit agreement pertaining to a minimum of $32,500,000 in policyholder surplus for Amwest Surety Insurance Company and its subsidiaries. The Company has provided Union Bank with pertinent information regarding an action plan and is currently seeking a waiver and amendment regarding this covenanat. Should the Company be unsuccessful in obtaining a waiver and amendment regarding this covenant, the Company would be deemed to be in default and all sums then owing shall be due and immediately payable. In such case, the Company would attempt to refinance the amounts owed to Union Bank. The Company currently has $14,500,000 outstanding on a total line of $15,000,000. (3) Earnings Per Share Basic EPS is calculated based on the weighted average number of common shares outstanding and diluted EPS includes the effects of dilutive potential common shares. The calculation of basic and diluted EPS for the three months ended March 31, 2000 and 1999 is as follows:
Three months ended March 31, Income Shares Per-Share (Numerator) (Denominator) Amount ($ in thousands) (Dollars) ------------------- -------------------- ---------------- Basic EPS: 2000 $ 803 4,331,381 $ .19 1999 $ 2,366 4,313,522 $ .55 Effect of Dilutive Securities: 2000 194 1999 21,218 Diluted EPS: 2000 $ 803 4,331,575 $ .19 1999 $ 2,366 4,334,740 $ .55
Item 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Results of Operations Premiums written increased 14% from $32,135,000 for the three months ended March 31, 1999 to $36,673,000 for the three months ended March 31, 2000. The premium growth was primarily due to premium increases in the surety product lines. Premiums for the surety division increased 15% from $25,033,000 for the three months ended March 31, 1999 to $28,705,000 for the three months ended March 31, 2000. The increase is attributable to increased writings in the court and commercial surety operations. Premiums for the property and casualty division also increased 12% from $7,102,000 for the three months ended March 31, 1999 to $7,970,000 for the three months ended March 31, 2000, primarily due to increased writings in the commercial trucking product, the California specialty motorcycle program and the Florida homeowners program. Net premiums earned increased 14% from $26,993,000 for the three months ended March 31, 1999 to $30,737,000 for the three months ended March 31, 2000 primarily due to a decrease in premiums ceded resulting from the nonrenewal, effective January 1, 2000, of the Company's annual aggregate stop loss treaty with Underwriters Reinsurance Company (Barbados), Inc. and the quota share reinsurance treaty with Underwriters Reinsurance Company, a New Hampshire domiciled reinsurer. The Company's ceded premium was $6,492,000 for the three months ended March 31, 1999 compared with $1,122,000 for the three months ended March 31, 2000. The amounts ceded for the 2000 period are related to the Company's excess of loss and SBA reinsurance programs that remain in place. Effective April 1, 2000, the Company signed a term sheet with Underwriters Reinsurance Company (Barbados), Inc. for a three-year annual aggregate stop loss reinsurance treaty. The Company is currently evaluating its options with respect to a quota share reinsurance treaty, as well as, with respect to the benefits of a more traditional reinsurance program. The Company generally earns premiums ratably over the assigned bond terms for the surety operations and the policy term for the specialty property and casualty operations. Net investment income increased 6% from $1,769,000 for the three months ended March 31, 1999 to $1,877,000 for the three months ended March 31, 2000. Although average invested assets decreased from $127,778,000 at March 31, 1999 to $117,994,000 at March 31, 2000 primarily due to returns of cash collateral balances during the latter part of the first quarter of 2000 thereby reducing balances for funds held as collateral from $50,271,000 at December 31, 1999 to $46,722,000 at March 31, 2000, the significantly higher investment yields achieved due to general increases in interest rates more than compensated for this reduction. Net realized investment gains increased from $740,000 for the three months ended March 31, 1999 to $1,154,000 for the three months ended March 31, 2000. The investments sold during the three months ended March 31, 2000 were primarily equity securities and convertible bonds. Commissions and fees increased 14% from $742,000 for the three months ended March 31, 1999 to $843,000 for the three months ended March 31, 2000. The increase is primarily due to an increase in fee income on the funds control business. Net losses and loss adjustment expenses increased 49% from $9,086,000 for the three months ended March 31, 1999 to $13,548,000 for the three months ended March 31, 2000. The loss ratio for the surety operations increased from 26% for the three months ended March 31, 1999 to 35% for the three months ended March 31, 2000 due to a number of significant losses in the contract and commercial surety product line during the first quarter. The loss ratio for the property and casualty operations also increased from 63% for the three months ended March 31, 1999 to 72% for the three months ended March 31, 2000 due to continued reserve strengthening in the commercial trucking line of business and a decrease in ceded losses. The net losses reflect the benefit of the annual aggregate stop loss reinsurance treaty in place for the 1997 to 1999 accident years. For the three months ended March 31, 2000, additional losses and loss adjustment expenses ceded to this treaty were $6,356,000 for the 1999 accident year and $448,000 for the 1998 accident year. Policy acquisition costs increased as a percentage of net premiums earned from 49%, or $13,322,000 to 50%, or $15,253,000 for the three months ended March 31, 1999 and 2000, respectively. The increase is primarily attributable to increased commission expense on the surety business. General operating costs decreased as a percentage of net premiums earned at 15%, or $3,939,000 for the three months ended March 31, 1999 to 13%, or $4,053,000 for the three months ended March 31, 2000. The decrease is due to increase in earned premium as described above. Interest expense increased from $554,000 for the three months ended March 31, 1999 to $620,000 for the three months ended March 31, 2000. This increase is attributable to an increase in average funds held on which the Company pays interest from $34,191,000 for the three months ended March 31, 1999 to $48,497,000 for the three months ended March 31, 2000. Income before income taxes decreased from $3,343,000 for the three months ended March 31, 1999 to $1,137,000 for the three months ended March 31, 2000 due to the factors outlined above. The effective tax rate was 29% for the three months ended March 31, 1999 a nd for the three months ended March 31, 2000. The primary reason for the variance from the corporate income tax rate of 34% is tax-advantaged income received on a portion of the Company's investment portfolio offset by certain non-deductible expenses. Net income decreased from $2,366,000 for the three months ended March 31, 1999 to $803,000 for the three months ended March 31, 2000 due to the factors outlined above. Liquidity and Capital Resources As of March 31, 2000, the Company held total cash and cash equivalents and invested assets of $122,427,000. This amount includes an aggregate of $46,722,000 in funds held as collateral which is shown as a liability on the Company's consolidated balance sheets. As of March 31, 2000, the Company's invested assets consisted of $95,781,000 in fixed maturities, held at market value, $5,006,000 in common equity securities, $3,861,000 in preferred equity securities, $7,970,000 in other invested assets and $2,767,000 in short-term investments, including certificates of deposit with original maturities less than one year. Because the parent company depends primarily on dividends from its insurance subsidiaries for its net cash flow requirements, absent other sources of cash flow, it cannot pay dividends materially in excess of the amount of dividends that could be paid by the insurance subsidiaries to the parent company. The State of Nebraska regulates, through the Office of the Insurance Commissioner, the amount of dividends which can be paid by a domestic insurance company utilizing various formula methodology. The Company has entered into a revolving credit agreement, as amended, with Union Bank for $15,000,000. At March 31, 2000, $14,500,000 of the $15,000,000 line is currently utilized leaving $500,000 currently available. The bank loan has a variable rate of interest based upon fluctuations in the London Interbank Offered Rate (LIBOR) and has amortizing principal payments. The first installment is due September 30, 2001. The interest rate at March 31, 2000 was 7.7%. The credit agreement contains certain financial covenants with respect to capital expenditures, business acquisitions, liquidity ratio, leverage ratio, tangible net worth, net profit and dividend payments. The Company is currently in violation of Section 5.13 of the revolving credit agreement pertaining to a minimum of $32,500,000 in policyholder surplus for Amwest Surety Insurance Company and its subsidiaries. The Company has provided Union Bank with pertinent information regarding an action plan and is currently seeking a waiver and amendment regarding this covenant. Should the Company be unsuccessful in obtaining a waiver and amendment regarding this covenant, the Company would be deemed to be in default and all sums then owing shall be due and immediately payable. In such case, the Company would attempt to refinance the amounts owed to Union Bank. The Company currently has $14,500,000 outstanding on a total line of $15,000,000. The Company, effective January 1, 1997, entered into an annual aggregate stop loss reinsurance treaty with Underwriters Reinsurance Company (Barbados), Inc. which treaty was renewed for the 1998 and 1999 accident years. For the 1997 accident year, the treaty covers surety losses and allocated loss adjustment expenses in excess of 25.9% of surety earned premium. For the 1998 accident year, the treaty has separate attachment points for surety and non-surety lines of business. On the surety line of business, when losses and loss adjustment expenses exceed 32.8% of net earned premiums and for all other lines when losses and loss adjustment expenses exceed 67% of net earned premiums, the reinsurer becomes liable for losses up to 7% of surety earned premiums. For the 1999 accident year, the treaty covers losses, excluding loss adjustment expenses, for all lines of business in excess of 26.5% through 28% of net earned premium and for losses in excess of 31% up to 39.7%. The Company has signed a term sheet with Underwriters Reinsurance Company (Barbados), Inc. for a three-year annual aggregate stop loss reinsurance treaty which becomes effective on April 1, 2000. Further, the Company has agreed to remove all remaining limits for the 1998 and 1999 accidents years, which amounted to $4,395,000 and $564,000, respectively as of March 31, 2000. In exchange for the partial commutation, losses previously ceded under these contracts will become a fixed obligation of the reinsurers. The quota share reinsurance treaty in effect at December 31, 1999 cedes 15% of net surety written premium for all surety written through Amwest Surety on a pro rata basis. This treaty provides statutory surplus enhancement for the Company due to the ceding commission received by the Company. The Company is currently evaluating its options with respect to a quota share reinsurance treaty, as well as, with respect to the benefits of a more traditional reinsurance program. The Company is a party to a lease with ACD2 for its corporate headquarters. This lease has a term of 15 years and contains provisions for scheduled lease charges. The Company's minimum commitment with respect to this lease in 2000 is approximately $670,000. The Company has the option to purchase this home office building and land commencing on April 27, 2000 and extending for a six month period at a predetermined rate for the building, with the value of land based on then existing market rates. The Company is currently exploring the potential exercise of such option. Other than the Company's obligations with respect to funds held as collateral and the Company's obligation to pay claims as they arise, the Company's commitments to pay principal and interest on the bank debt and lease expenses as noted above, the Company has no significant cash commitments. The Company believes that its cash flows from operations and other present sources of capital are sufficient to sustain its needs for at least the remainder of 2000. The Company used $5,733,000 in cash from operating activities for the three months March 31, 1999 as compared to using $9,955,000 for the three months ended March 31, 2000. The Company generated $316,000 in cash for investing activities for the three months ended March 31, 1999 as compared to generating $4,695,000 for the three months ended March 31, 2000. The Company generated $7,268,000 in cash from financing activities for the three months ended March 31, 1999 as compared t using $3,519,000 for the three months ended March 31, 2000. The cash used for operating activities in 2000 increased primarily due to increases in reinsurance recoverables and timing of premium payments to reinsurers. The increase in reinsurance recoverables is attributable to increased loss payments made during the quarter. Other Matters Year 2000 issues: The Company did not experience material Year 2000 problems and does not expect to incur any significant additional costs related to Year 2000 matters. Other issues: Certain statements contained in this Form 10-Q regard matters that are not historical facts and are forward-looking statements. Because such forward-looking statements include risks and uncertainties, actual results may differ materially from those expressed in or implied by such forward- looking statements. Factors that could cause actual results to differ materially include, but are not limited to: the ineffectiveness of the recently modified commercial transportation products, a deterioration in premiums written or losses incurred in the Company's surety and other specialty businesses, the ability to achieve increased percentage writings of commercial surety and court products, the lack of adherence by branch personnel to Company underwriting guidelines, failure of the Company to improve its leverage which could result in a reduction in the ratings from A.M. Best and other industry ratios agencies, the ability of the Company to obtain a waiver or amendment regarding a covenant included in the Company's revolving bank credit agreement, the ability of the Company to negotiate a quota share reinsurance treaty, a reduction in the investment yield earned on the Company's investment portfolio, or a general economic decline. The Company undertakes no obligation to release publicly the results of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The table on the next page shows, for the periods indicated, the gross premiums written, net premiums earned, net losses and loss adjustment expenses and loss ratios for the Company's specialty property and casualty operations and surety operations. TABLE 1 AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES SUMMARY OF PREMIUMS AND LOSSES BY PRODUCT LINE (Dollars in thousands)
Three months ended Year ended March 31, December 31, Type of Bond 2000 1999 1999 1998 ------------ ---- ---- ---- ---- Total Surety Gross premiums written $ 28,703 $ 25,033 $ 108,184 $ 102,270 Net premiums earned 23,608 21,500 85,500 84,166 Net losses and loss adjustment expenses 8,380 5,641 31,175 23,262 Loss and loss adjustment expense ratio 35% 26% 37% 28% Property & Casualty Gross premiums written $ 7,970 $ 7,102 $ 28,304 $ 30,549 Net premiums earned 7,129 5,493 25,044 21,805 Net losses and loss adjustment expenses 5,168 3,445 17,135 17,569 Loss and loss adjustment expense ratio 72% 63% 68% 81% Total Company Gross premiums written $ 36,673 $ 32,135 $ 136,488 $ 132,819 Net premiums earned 30,737 26,993 110,544 105,971 Net losses and loss adjustment expenses 13,548 9,086 48,310 40,831 Loss and loss adjustment expense ratio 44% 34% 44% 39%
PART II - OTHER INFORMATION AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES Items 1-4: LEGAL PROCEEDINGS, CHANGE IN SECURITIES, DEFAULTS UPON SENIOR SECURITIES,SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS, None Items 5: OTHER INFORMATION Effective May 10, 2000, Steven R. Kay resigned as the Company's Executive Vice President and Chief Financial Officer and as a member of its Board of Directors. He also resigned from all positions with the Company's subsidiaries in order to pursue other business interests. Item 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits See the Exhibit Index on page 15. (b) Reports on Form 8-K There were no reports filed on Form 8-K during the three months ended March 31, 2000. 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. AMWEST INSURANCE GROUP, INC. Date: May 19, 2000 by: /s/ JOHN E. SAVAGE ------------------------------------- John E. Savage President, Chief Executive Officer and Chief Operating Officer (Principal Executive Officer) by: /s/ PHILLIP E. HUFF ------------------------------------- Phillip E. Huff Senior Vice-President, Treasurer (Principal Financial and Principal Accounting Officer) AMWEST INSURANCE GROUP, INC. AND SUBSIDIARIES EXHIBIT INDEX Exhibit Number Description Location 2 Plan of acquisition, reorganization, arrangement, liquidation or succession None 4 Instruments defining the rights of securityholders, including indentures Not required 11 Statement re computation of per share earnings Page 8, Note 3 15 Letter re unaudited interim financial information None 18 Letter re change in accounting principles None 19 Previously unfiled documents None 20 Report furnished to security holders None 23 Published report regarding matters submitted to vote of security holders None 24 Consents of experts and counsel None 25 Power of attorney None 28 Additional exhibits None EX-27 2 FDS --
7 (Replace this text with the legend) 0000780118 SIOBHAN HORTON 1,000 U.S. DOLLARS 3-MOS DEC-31-1999 JAN-1-2000 MAR-31-2000 1 95,781 0 0 8,867 0 0 115,385 7,042 30,336 25,150 233,168 54,826 53,762 0 0 14,500 0 0 43 56,636 233,168 30,737 1,877 1,154 843 13,548 15,253 4,053 1,137 334 803 0 0 0 803 0.19 0.19 56,466 19,654 384 5,501 16,177 54,826 0
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