Baldwin & Lyons, Inc. November 3, 2016

Unaudited Third Quarter Financial Statements Investor Contact: William Vens

investors@baldwinandlyons.com

(317) 429-2554

BALDWIN & LYONS ANNOUNCES RESULTS FOR THE QUARTER AND NINE MONTHS

●	Gross premiums written increased 6.2% for the third quarter of 2016 and 4.3% for the nine months ended September 30, 2016, compared to prior year periods.

●	Reserve strengthening for both the discontinued reinsurance assumed line of $6.0 million and unallocated loss adjustment expense reserve of $4.1 million increased the consolidated combined ratio to 106.8% for the third quarter and 96.3% for the nine months ended September 30, 2016.

●	Excluding the impact of reserve strengthening, Property & Casualty Insurance combined ratio was 91.2% for the third quarter and 90.2% for the nine months ended September 30, 2016.

Carmel, Indiana, November 3, 2016—Baldwin & Lyons, Inc. (NASDAQ: BWINA, BWINB) today announced third quarter net income of $4.0 million, or $.27 per share, which compares to net income of $7.8 million, or $.52 per share, for the prior year's third quarter. Net income for the first nine months of 2016 totaled $24.1 million, or $1.60 per share, compared to $19.7 million, or $1.31 per share, for the prior year period.

Gross premiums written by the Company's insurance subsidiaries for the current quarter was a record $101.9 million, 6.2% higher than the $96.0 million written during the third quarter of 2015. The increase was driven by the continued strong performance of the Company's core Fleet Transportation products. Gross premiums written for the nine months ended September 30, 2016 totaled a record $298.1 million, 4.3% higher than the previous record $285.7 million written during the first nine months of 2015.

Net premiums earned for the third quarter of 2016 was $71.2 million, 8.8% higher than last year's third quarter total, driven by a 16.7% increase in premiums earned from Fleet Transportation products, partially offset by planned declines in reinsurance products. For the nine months ended September 30, 2016, earned premiums increased 4.8% to a record nine month total of $206.9 million.

Net investment income of $3.5 million, reflected an increase of 17% compared to the third quarter of 2015 due to higher average bond yields and increases in average funds invested resulting from positive cash flow. For the nine months ended September 30, 2016, net investment income was $10.5 million, reflecting an increase of 20% compared to the prior year period.

Book value per share on September 30, 2016 of $26.98 increased $.18 per share during the third quarter, after the payment of cash dividends to shareholders totaling $.26 per share. For the nine months ended September 30, 2016, book value per share has increased $.73 after the payment of cash dividends to shareholders totaling $.78 per share. The combination of the increase in book value and dividends represents a 5.8% total return on beginning book value for the nine months ended September 30, 2016.

The Company's net income, determined in accordance with U.S. generally accepted accounting principles (GAAP), includes items that may not be indicative of ongoing operations. The following table reconciles income before federal income taxes to underwriting income, a non-GAAP financial measure that is a useful tool for investors and analysts in analyzing ongoing operating trends.

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	Three Months Ended						Nine Months Ended
	September 30						September 30
	2016			2015			2016			2015

Income before federal income taxes	$	5,635		$	11,610		$	35,988		$	29,331
Less: Net realized gains (losses) on investments		7,732			(2,086	)		17,024			491
Operating income (loss), before federal income taxes	$	(2,097	)	$	13,696		$	18,964		$	28,840
Less: Investment income		3,513			3,014			10,501			8,727
Less: Corporate and other expense (income)		(765	)		150			862			336
Underwriting income (loss)	$	(4,845	)	$	10,532		$	7,601		$	19,777
Reinsurance underwriting income (loss) in run-off ¹		(6,854	)		86			(7,680	)		1,099
P&C Insurance underwriting income	$	2,009		$	10,446		$	15,281		$	18,678
Unallocated loss adjustment expense reserve strengthening ²		4,100			-			4,100			-
P&C Insurance underwriting income before reserve strengthening	$	6,109		$	10,446		$	19,381		$	18,678

During our review of the September 30, 2016 reserve position, we reacted to two developments:

¹During 2016, we have encountered adverse loss development in our discontinued assumed reinsurance business. Our actuarial analysis at September 30, 2016 indicated an additional reserve need of $6.0 million related to prior accident years.

²In connection with the significant growth in our business, we strengthened our unallocated loss adjustment expense reserve by $4.1 million during the quarter.

Note: The Company currently operates within two reportable business segments: Property and Casualty (P&C) Insurance and Reinsurance.

Consolidated Operating Income (Loss)

Consolidated operating loss was $2.1 million for the third quarter. For the nine months ended September 30, 2016, consolidated operating income was $19.0 million (including the reserve strengthening items).

Absent the $10.1 million of reserve strengthening items noted above, the consolidated net operating income was $8.0 million for the third quarter. For the nine months ended September 30, 2016, the consolidated net operating income was $29.1 million (also excluding the reserve strengthening items).

Reinsurance Operations (in run-off)

Including the reserve strengthening noted above of $6.0 million, Reinsurance Operations produced an underwriting loss of $6.9 million for the third quarter. For the nine months ended September 30, 2016, Reinsurance Operations produced an underwriting loss of $7.7 million.

Property & Casualty Insurance Operations

Property & Casualty Insurance produced underwriting income of $2.0 million, resulting in a combined ratio for the third quarter of 97.1%. For the nine months ended September 30, 2016, the combined ratio was 92.3% (including reserve strengthening), producing $15.3 million in underwriting income.

Absent the $4.1 million unallocated loss adjustment expense reserve strengthening noted above, Property & Casualty Insurance produced underwriting income of $6.1 million, resulting in a combined ratio for the third quarter of 91.2%. For the nine months ended September 30, 2016, the consolidated combined ratio was 90.2% (excluding unallocated loss adjustment expense reserve strengthening), producing $19.4 million in underwriting income.

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Conference Call Information:

Baldwin & Lyons, Inc. has scheduled its quarterly conference call for Thursday, November 3, 2016, at 11:00 AM ET (New York time) to discuss results for the third quarter ended September 30, 2016.

To participate via teleconference, investors may dial 1-888-364-3108 (U.S./Canada) or 1-719-457-2621 (International or local) at least five minutes prior to the beginning of the call. A replay of the call will be available through November 10, 2016 by calling 1-877-870-5176 or 1-858-384-5517 and referencing passcode 6191965. Investors and interested parties may also listen to the call via a live webcast, accessible on the company's web site via a link at the top of the main Investor Relations page. To participate in the webcast, please register at least fifteen minutes prior to the start of the call. The webcast will be archived on this site until April 28, 2017. The webcast may be accessed directly at: http://public.viavid.com/player/index.php?id=120945.

Also available on the investor relations section of our web site are complete interim financial statements and copies of our filings with the Securities and Exchange Commission.

Forward-looking statements in this report are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve inherent risks and uncertainties. Readers are encouraged to review the Company's annual report for its full statement regarding forward-looking information.

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Financial Highlights (unaudited)
Baldwin & Lyons, Inc. and Subsidiaries
(In thousands, except per share data)	Three Months Ended						Nine Months Ended
	September 30						September 30
	2016			2015			2016			2015

Operating revenue	$	75,955		$	69,632		$	221,406		$	210,037
Net investment gains (losses)		7,732			(2,086	)		17,024			491

Total revenue	$	83,687		$	67,546		$	238,430		$	210,528

Net operating income (loss)	$	(1,025	)	$	9,136		$	13,016		$	19,422
Net investment gains (losses),
net of federal income taxes		5,026			(1,356	)		11,066			319

Net income	$	4,001		$	7,780		$	24,082		$	19,741


Per share data - diluted:
Average number of shares		15,084			15,018			15,084			15,019

Net operating income (loss)	$	(.06	)	$	.61		$	.86		$	1.29
Net investment gains (losses)		.33			(.09	)		.74			.02

Net income	$	.27		$	.52		$	1.60		$	1.31

Dividends paid to shareholders	$	.26		$	.25		$	.78		$	.75



Comprehensive income, net of tax
Net income	$	4,001		$	7,780		$	24,082		$	19,741
Unrealized net gains (losses) on securities		2,736			(15,931	)		(1,514	)		(14,957	)
Foreign currency translation adjustments		(145	)		(429	)		398			(1,102	)
Comprehensive income (loss)	$	6,592		$	(8,580	)	$	22,966		$	3,682


Annualized:
Total Value Creation ¹		6.6	%		-8.5	%		7.7	%		1.2	%

Return on average shareholders' equity:
Net operating income		-1.1	%		10.3	%		4.8	%		7.4	%
Net income		4.3	%		8.8	%		8.9	%		7.5	%

Consolidated combined ratio of
insurance subsidiaries (GAAP basis):		106.8	%		83.9	%		96.3	%		90.0	%


¹Total Value Creation is the summation of the change in book value plus dividends
paid divided by beginning book value.

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Balance Sheets

(in thousands, except per share data)



	September 30		December 31
	2016		2015
Assets
Investments ¹:
Fixed maturities ($484,981)	$	486,137	$	437,184
Equity securities ($78,056)		134,454		145,498
Limited partnerships, at equity		77,197		75,458
Short-term ²		1,500		2,220
		699,288		660,360
Cash and cash equivalents		67,372		73,538
Accounts receivable		62,195		66,522
Reinsurance recoverable		242,183		215,888
Other assets		70,570		65,761
Current federal income taxes		3,770		3,702
	$	1,145,378	$	1,085,771

Liabilities and shareholders' equity
Reserves for losses and loss expenses	$	565,559	$	513,596
Reserves for unearned premiums		21,916		25,291
Borrowings under line of credit		20,000		20,000
Accounts payable and accrued expenses		118,200		121,188
Deferred federal income taxes		12,781		11,198
		738,456		691,273
Shareholders' equity:
Common stock-no par value		644		641
Additional paid-in capital		54,286		52,946
Unrealized net gains on investments		37,410		38,924
Retained earnings		314,582		301,987
		406,922		394,498
	$	1,145,378	$	1,085,771

Number of common and common
equivalent shares outstanding		15,084		15,026
Book value per outstanding share	$	26.98	$	26.25

¹2016 cost in parentheses

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Operations

(in thousands, except per share data)

	Three Months Ended						Nine Months Ended
	September 30						September 30
	2016			2015			2016		2015
Revenues
Net premiums earned	$	71,235		$	65,445		$	206,870	$	197,340
Net investment income		3,513			3,014			10,501		8,727
Net realized gains (losses) on investments		7,732			(2,086	)		17,024		491
Commissions and other income		1,207			1,173			4,035		3,970
		83,687			67,546			238,430		210,528
Expenses
Losses and loss expenses incurred		56,827			35,212			138,116		113,890
Other operating expenses		21,225			20,724			64,326		67,307
		78,052			55,936			202,442		181,197
Income before federal income taxes		5,635			11,610			35,988		29,331
Federal income taxes		1,634			3,830			11,906		9,590
Net income	$	4,001		$	7,780		$	24,082	$	19,741

Per share data - diluted:
Income before net gains (losses) on investments	$	(.06	)	$	.61		$	.86	$	1.29
Net gains (losses) on investments		.33			(.09	)		.74		.02
Net income	$	.27		$	.52		$	1.60	$	1.31

Dividends	$	.26		$	.25		$	.78	$	.75

Reconciliation of shares outstanding:
Average shares outstanding - basic		15,084			15,015			15,068		15,009
Dilutive effect of share equivalents		-			3			16		10
Average shares outstanding - diluted		15,084			15,018			15,084		15,019

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Baldwin & Lyons, Inc. and Subsidiaries
Unaudited Consolidated Statements of Cash Flows

(in thousands)

	Nine Months Ended
	September 30
	2016			2015

Net cash provided by operating activities	$	32,397		$	30,806
Investing activities:
Purchases of available-for-sale investments		(310,398	)		(275,591	)
Proceeds from sales or maturities
of available-for-sale investments		286,580			262,707
Net sales of short-term investments		720			746
Other investing activities		(3,978	)		(1,281	)
Net cash used in investing activities		(27,076	)		(13,419	)
Financing activities:
Dividends paid to shareholders		(11,885	)		(11,267	)
Net cash used in financing activities		(11,885	)		(11,267	)

Effect of foreign exchange rates on cash and cash equivalents		398			(1,102	)

Increase (decrease) in cash and cash equivalents		(6,166	)		5,018
Cash and cash equivalents at beginning of period		73,538			64,632
Cash and cash equivalents at end of period	$	67,372		$	69,650

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Baldwin & Lyons, Inc. and Subsidiaries

Notes to Unaudited Consolidated Financial Statements

(1)

The accompanying unaudited condensed financial statements have been prepared in accordance with the instructions to Form 10-Q but do not include all of the information and footnotes as disclosed in the Company's annual audited financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for fair presentation have been included. Operating results for the interim periods are not necessarily indicative of the results that may be expected for the year ended December 31, 2016. Interim financial statements should be read in conjunction with the Company's annual audited financial statements.

(2)

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	Gross Premiums Written		Net Premiums Written		Net Premiums Earned		Loss & LAE Ratio			Expense Ratio			Combined Ratio
Underwriting Operations:
Quarter ended September 30, 2016 ¹

Property & Casualty Insurance	$	100,467	$	69,075	$	68,828		70.9	%		26.2	%		97.1	%
Reinsurance		1,454		1,455		2,407		334.7	%		50.0	%		384.7	%

Totals	$	101,921	$	70,530	$	71,235		79.8	%		27.0	%		106.8	%

Quarter ended September 30, 2015

Property & Casualty Insurance	$	92,584	$	59,576	$	60,837		53.7	%		29.2	%		82.9	%
Reinsurance		3,368		3,325		4,608		55.6	%		42.5	%		98.1	%

Totals	$	95,952	$	62,901	$	65,445		53.8	%		30.1	%		83.9	%

Nine months ended September 30, 2016

Property & Casualty Insurance	$	291,929	$	196,659	$	197,970		63.3	%		29.0	%		92.3	%
Reinsurance		6,191		6,105		8,900		143.6	%		42.7	%		186.3	%

Totals	$	298,120	$	202,764	$	206,870		66.8	%		29.5	%		96.3	%

Nine months ended September 30, 2015

Property & Casualty Insurance	$	272,260	$	177,091	$	180,152		58.4	%		31.2	%		89.6	%
Reinsurance		13,467		12,949		17,188		50.6	%		43.0	%		93.6	%

Totals	$	285,727	$	190,040	$	197,340		57.7	%		32.3	%		90.0	%

¹Includes reserve strengthening items noted above

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	Gross Premiums Written		Net Premiums Written		Net Premiums Earned		Loss & LAE Ratio
Selected Product Data:
Quarter ended September 30, 2016 ¹
Property & Casualty Insurance:
Fleet Transportation	$	96,577	$	66,745	$	66,066		69.6	%
All Other		3,890		2,330		2,762		101.3	%
Total	$	100,467	$	69,075	$	68,828		70.9	%


Quarter ended September 30, 2015
Property & Casualty Insurance:
Fleet Transportation	$	88,020	$	56,315	$	56,616		50.7	%
All Other		4,564		3,261		4,221		92.8	%
Total	$	92,584	$	59,576	$	60,837		53.7	%



Nine months ended September 30, 2016
Property & Casualty Insurance:
Fleet Transportation	$	280,668	$	189,892	$	188,444		61.8	%
All Other		11,261		6,767		9,526		93.3	%
Total	$	291,929	$	196,659	$	197,970		63.3	%


Nine months ended September 30, 2015
Property & Casualty Insurance:
Fleet Transportation	$	256,262	$	164,688	$	166,309		55.3	%
All Other		15,998		12,403		13,843		95.3	%
Total	$	272,260	$	177,091	$	180,152		58.4	%


							September			December
								2016		2015

Net GAAP loss and loss expense reserves							$	327,510		$ 301,753
Net statutory loss and loss expense reserves								331,042		308,718
Consolidated statutory surplus								400,829		390,774

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