<PAGE>



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

                                    FORM 10-Q

(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

    For the Quarterly Period Ended June 30, 2002

[ ] 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 001-11462


                          DELPHI FINANCIAL GROUP, INC.
--------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                    <C>                                <C>

            Delaware                           (302) 478-5142                     13-3427277
-------------------------------         ----------------------------       ----------------------
(State or other jurisdiction of           (Registrant's telephone             (I.R.S. Employer
incorporation or organization)          number, including area code)       Identification Number)
</TABLE>


        1105 North Market Street, Suite 1230,
        P.O. Box 8985, Wilmington, Delaware                    19899
    ----------------------------------------------        ----------------
       (Address of principal executive offices)              (Zip Code)



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 filing requirements
for the past 90 days:

                   Yes   X                      No
                       -----                       -----



          As of July 31, 2002, the Registrant had 17,240,882 shares of
 Class A Common Stock and 3,285,218 shares of Class B Common Stock outstanding.





<PAGE>


                          DELPHI FINANCIAL GROUP, INC.
                                    FORM 10-Q
                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                              AND OTHER INFORMATION


                                                                            Page
                                                                            ----
PART I.   FINANCIAL INFORMATION

          Consolidated Statements of Income for the Three and Six
              Months Ended June 30, 2002 and 2001..........................   3

          Consolidated Balance Sheets at June 30, 2002 and
              December 31, 2001............................................   4

          Consolidated Statements of Shareholders' Equity for the
              Six Months Ended June 30, 2002 and 2001......................   5

          Consolidated Statements of Cash Flows for the
              Six Months Ended June 30, 2002 and 2001......................   6

          Notes to Consolidated Financial Statements.......................   7

          Management's Discussion and Analysis of Financial
              Condition and Results of Operations..........................  10


PART II.  OTHER INFORMATION

          Item 4.  Submission of Matters to a Vote of Security Holders.....  17

          Item 6.  Exhibits and Reports on Form 8-K........................  17

          Signatures.......................................................  18


                                      -2-

<PAGE>


                          PART I. FINANCIAL INFORMATION

                  DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
                        CONSOLIDATED STATEMENTS OF INCOME
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)


<TABLE>
<CAPTION>

                                                                  Three Months Ended              Six Months Ended
                                                                       June 30,                       June 30,
                                                              --------------------------     ---------------------------
                                                                 2002            2001           2002            2001
                                                              -----------    -----------     -----------    ------------
<S>                                                           <C>            <C>             <C>            <C>
Revenue:
   Premium and fee income..................................   $   156,348    $   122,513     $   313,175    $   245,818
   Net investment income...................................        39,105         39,433          80,169         78,499
   Net realized investment gains...........................           218            225             313            676
                                                              -----------    -----------     -----------    ------------
                                                                  195,671        162,171         393,657        324,993
                                                              -----------    -----------     -----------    ------------
Benefits and expenses:
   Benefits, claims and interest credited to policyholders.       116,415         90,170         236,948        179,869
   Commissions.............................................        12,184         10,531          22,031         19,966
   Amortization of cost of business acquired...............        10,623          7,759          21,072         16,375
   Other operating expenses................................        24,663         22,390          49,988         45,406
                                                              -----------    -----------     -----------    -----------
                                                                  163,885        130,850         330,039        261,616
                                                              -----------    -----------     -----------    ------------

      Operating income.....................................        31,786         31,321          63,618         63,377

Interest expense:
   Corporate debt..........................................         2,230          2,665           4,758          6,474
   Dividends on Capital Securities of Delphi Funding L.L.C.           839          1,388           1,678          3,665
                                                              -----------    -----------     -----------    -----------
                                                                    3,069          4,053           6,436         10,139

      Income before income tax expense and
       extraordinary (loss) gain...........................        28,717         27,268          57,182         53,238

Income tax expense.........................................         8,985          8,796          17,880         17,138
                                                              -----------    -----------     -----------    -----------

      Income before extraordinary (loss) gain..............        19,732         18,472          39,302         36,100

Extraordinary (loss) gain, net of income taxes.............          (216)         3,196            (216)          6,213
                                                              -----------    -----------     -----------    ------------

      Net income...........................................   $    19,516    $    21,668     $    39,086    $    42,313
                                                              ===========    ===========     ===========    ===========


Basic results per share of common stock:
   Income before extraordinary (loss) gain.................   $       0.95   $      0.90     $      1.90    $      1.76
   Net income..............................................           0.94          1.06            1.89           2.06

Diluted results per share of common stock:
   Income before extraordinary (loss) gain.................   $       0.93   $      0.88     $      1.85    $      1.71
   Net income..............................................           0.92          1.03            1.84           2.01

Dividend paid per share of common stock....................   $       0.07   $      0.07     $      0.14    $      0.14

</TABLE>


                 See notes to consolidated financial statements.

                                      -3-


<PAGE>

                  DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                  (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
                                   (UNAUDITED)
<TABLE>
<CAPTION>
                                                                                      June 30,        December 31,
                                                                                        2002              2001
                                                                                   --------------   ---------------
<S>                                                                                 <C>              <C>
Assets:
   Investments:
      Fixed maturity securities, available for sale.............................    $  2,333,550     $   2,223,789
      Short-term investments....................................................         163,087            92,862
      Other investments.........................................................         129,725           110,563
                                                                                    ------------     -------------
                                                                                       2,626,362         2,427,214
   Cash.........................................................................          13,839            11,682
   Cost of business acquired....................................................         170,371           168,894
   Reinsurance receivables......................................................         392,020           388,910
   Goodwill.....................................................................          93,929            93,929
   Other assets.................................................................         174,992           171,834
   Assets held in separate account..............................................          72,613            73,683
                                                                                    ------------     -------------
      Total assets..............................................................    $  3,544,126     $   3,336,146
                                                                                    ============     =============


Liabilities and Shareholders' Equity:
   Future policy benefits:
      Life......................................................................    $    230,706     $     222,363
      Accident and health.......................................................         371,683           348,267
   Unpaid claims and claim expenses:
      Life......................................................................          40,289            34,616
      Accident and health.......................................................         168,291           167,628
      Casualty..................................................................         531,584           506,778
   Policyholder account balances................................................         829,860           817,543
   Corporate debt...............................................................         122,150           125,675
   Other liabilities and policyholder funds.....................................         522,213           431,871
   Liabilities related to separate account......................................          62,503            63,361
                                                                                    ------------     -------------
      Total liabilities.........................................................       2,879,279         2,718,102
                                                                                    ------------     -------------

   Company-obligated mandatorily redeemable Capital Securities of Delphi
      Funding L.L.C. holding solely junior subordinated deferrable interest
      debentures of the Company.................................................          36,050            36,050
                                                                                    ------------     -------------

   Shareholders' equity:
      Preferred Stock, $.01 par; 10,000,000 shares authorized...................            --               --
      Class A Common Stock, $.01 par; 40,000,000 shares authorized;
         18,712,850 and 17,763,428 shares issued and outstanding, respectively               187               178
Class B Common Stock, $.01 par; 20,000,000 shares authorized;
         3,293,555 and 4,132,688 shares issued and outstanding, respectively....              33                41
      Additional paid-in capital................................................         371,962           369,385
      Net unrealized depreciation on investments................................          (2,980)          (10,985)
      Retained earnings.........................................................         311,094           274,874
      Treasury stock, at cost; 1,505,290 shares of Class A Common Stock.........         (51,499)          (51,499)
                                                                                    ------------     -------------
         Total shareholders' equity.............................................         628,797           581,994
                                                                                    ------------     -------------
             Total liabilities and shareholders' equity.........................    $  3,544,126     $   3,336,146
                                                                                    ============     =============
</TABLE>




                 See notes to consolidated financial statements.


                                      -4-

<PAGE>




                  DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
                 CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                  Net
                                                                               Unrealized
                                         Class A      Class B     Additional  Depreciation
                                         Common       Common       Paid-in         on         Retained      Treasury
                                          Stock        Stock       Capital     Investments    Earnings        Stock         Total
                                        ---------    ---------    -----------  -----------    ---------     ---------     ---------

<S>                                     <C>          <C>           <C>          <C>           <C>           <C>           <C>
Balance, January 1, 2001.............   $     168    $      48     $ 366,834    $ (53,622)    $ 274,060     $ (49,295)    $ 538,193
                                                                                                                          ---------

Net income...........................        --           --            --           --          42,313          --          42,313
Decrease in net unrealized
   depreciation on investments.......        --           --            --          8,496          --            --           8,496
                                                                                                                          ---------
Comprehensive income                                                                                                         50,809

Issuance of stock, exercise of stock
   options and share conversions.....           7           (6)          773         --            --            --             774
Cash dividends.......................        --           --            --           --          (2,841)         --          (2,841)
                                        ---------    ---------     ---------    ---------     ---------     ---------     ---------

Balance, June 30, 2001...............   $     175    $      42     $ 367,607    $ (45,126)    $ 313,532     $ (49,295)    $ 586,935
                                        =========    =========     =========    =========     =========     =========     =========


Balance, January 1, 2002.............   $     178    $      41     $ 369,385    $ (10,985)    $ 274,874     $ (51,499)    $ 581,994
                                                                                                                          ---------

Net income...........................        --           --            --           --          39,086          --          39,086
Decrease in net unrealized
   depreciation on investments.......        --           --            --          8,005          --            --           8,005
                                                                                                                          ---------
Comprehensive income.................                                                                                        47,091

Issuance of stock, exercise of stock
   options and share conversions.....           9           (8)        2,577         --            --            --           2,578
Cash dividends.......................        --           --            --           --          (2,866)         --          (2,866)
                                        ---------    ---------     ---------    ---------     ---------     ---------     ---------

Balance, June 30, 2002...............   $     187    $      33     $ 371,962    $  (2,980)    $ 311,094     $ (51,499)    $ 628,797
                                        =========    =========     =========    =========     =========     =========     =========
</TABLE>



                 See notes to consolidated financial statements.


                                      -5-
<PAGE>



                  DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                             (DOLLARS IN THOUSANDS)
                                   (UNAUDITED)

<TABLE>
<CAPTION>
                                                                                             Six Months Ended
                                                                                                 June 30,
                                                                                        ---------------------------
                                                                                            2002           2001
                                                                                        -----------     -----------
<S>                                                                                     <C>             <C>
Operating activities:
   Net income........................................................................   $    39,086     $    42,313
   Adjustments to reconcile net income to net cash provided by operating activities:
      Change in policy liabilities and policyholder accounts.........................        75,246          29,342
      Net change in reinsurance receivables and payables.............................        (9,265)        (13,361)
      Amortization, principally the cost of business acquired and investments........           837           7,119
      Deferred costs of business acquired............................................       (33,729)        (23,584)
      Net realized gains on investments..............................................          (313)           (676)
      Net change in trading account securities.......................................         3,200          28,832
      Net change in federal income tax liability.....................................        10,282          26,050
      Extraordinary loss (gain)......................................................           216          (6,213)
      Other..........................................................................         3,604             401
                                                                                        -----------     ------------
        Net cash provided by operating activities....................................        89,164          90,223
                                                                                        -----------     ------------

Investing activities:
   Purchases of investments and loans made...........................................      (492,711)       (320,746)
   Sales of investments and receipts from repayment of loans.........................       319,379         482,943
   Maturities of investments.........................................................        96,395          34,168
   Net change in short-term investments..............................................       (70,224)        (70,646)
   Change in deposit in separate account.............................................           212            (315)
                                                                                        -----------     -----------
        Net cash (used) provided by investing activities.............................      (146,949)        125,404
                                                                                        -----------     -----------

Financing activities:
   Deposits to policyholder accounts.................................................        38,727          43,186
   Withdrawals from policyholder accounts............................................       (28,776)        (34,930)
   Proceeds from issuance of common stock and exercise of stock options .............         2,578             774
   Dividends paid on common stock....................................................        (2,866)         (2,841)
   Borrowings under Credit Agreements................................................        29,000             --
   Principal payments under Credit Agreements........................................       (13,000)       (150,000)
   Principal payment under SIG Senior Notes..........................................        (9,000)         (9,000)
   Change in liability for Federal Home Loan Bank advances...........................        35,000          (6,500)
   Repurchase of Capital Securities..................................................           --          (43,379)
   Repurchase of Senior Notes........................................................       (10,874)            --
   Change in liability for securities loaned or sold under agreements to repurchase..        19,153          (9,935)
                                                                                        -----------     -----------
        Net cash provided (used) by financing activities.............................        59,942        (212,625)
                                                                                        -----------     -----------

Increase in cash.....................................................................         2,157           3,002
Cash at beginning of period..........................................................        11,682          12,344
                                                                                        -----------     -----------
      Cash at end of period..........................................................   $    13,839     $    15,346
                                                                                        ===========     ===========
</TABLE>



                 See notes to consolidated financial statements.



                                      -6-
<PAGE>


                  DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

The financial statements included herein were prepared in conformity with
accounting principles generally accepted in the United States ("GAAP") for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by GAAP for complete financial statements. Such
principles were applied on a basis consistent with that reflected in the
Company's report on Form 10-K for the year ended December 31, 2001. The
information furnished includes all adjustments and accruals of a normal
recurring nature which are, in the opinion of management, necessary for a fair
presentation of results for the interim periods. Operating results for the six
months ended June 30, 2002 are not necessarily indicative of the results that
may be expected for the year ended December 31, 2002. Certain reclassifications
have been made in the 2001 financial statements to conform to the 2002
presentation. For further information refer to the consolidated financial
statements and footnotes thereto included in the Company's report on Form 10-K
for the year ended December 31, 2001. Capitalized terms used herein without
definition have the meanings ascribed to them in the Company's report on Form
10-K for the year ended December 31, 2001.

Recently Adopted Accounting Standards. Effective January 1, 2002, the Company
adopted Statement of Financial Accounting Standards ("SFAS") No. 142, "Goodwill
and Other Intangible Assets." Under SFAS 142, goodwill and intangible assets
deemed to have indefinite lives are no longer amortized over a pre-determined
period, but are required to be periodically reviewed for impairment. Other
intangible assets with finite lives continue to be amortized over their useful
lives. An impairment loss resulting from the adoption of SFAS 142 must be
accounted for as a cumulative effect of a change in accounting principle and
recognized in the entity's first interim period financial statements following
the effective date regardless of the interim period in which the measurement is
completed. Any subsequent impairment losses will be reflected within operating
results in the income statement. At January 1, 2002, unamortized goodwill of
$60.9 million was attributable to the acquisition of SNCC, whose operations are
included in the group employee benefits segment, and $33.0 million was
attributable to the acquisition of Matrix, whose operations do not meet the
quantitative threshold for reportable segments and, therefore, are reported in
other segments. In accordance with SFAS 142, the Company during the first half
of 2002 completed its transitional tests for impairment of goodwill, and based
on these tests, the Company determined that no impairment of goodwill had
occurred.

Income before extraordinary loss was $39.3 million, or $1.90 per share ($1.85
per share assuming dilution), for the first half of 2002, and $19.7 million, or
$0.95 per share ($0.93 per share assuming dilution), for the second quarter of
2002. Income before extraordinary gain, excluding the effects of goodwill
amortization, would have been $37.7 million, or $1.84 per share ($1.79 per share
assuming dilution), for the first half of 2001, and $19.3 million, or $0.94 per
share ($0.92 per share assuming dilution), for the second quarter of 2001. The
following table provides a reconciliation of reported net income to adjusted net
income and the related earnings per share data as if the provisions of SFAS 142
related to goodwill had been adopted as of January 1, 2001:

<TABLE>
<CAPTION>
                                                                   Three Months Ended         Six Months Ended
                                                                        June 30,                     June 30,
                                                                 ---------------------        ---------------------
                                                                    2002        2001            2002        2001
                                                                 ---------   ---------        ---------   ---------
                                                                     (dollars in thousands, except per share data)

<S>                                                              <C>         <C>              <C>         <C>
Net income, as reported.......................................   $  19,516   $  21,668        $  39,086   $  42,313
Add back:  goodwill amortization..............................         --          799              --        1,598
                                                                 ---------   ---------        ---------   ---------
     Adjusted net income......................................   $  19,516   $  22,467        $  39,086   $  43,911
                                                                 =========   =========        =========   =========

Basic results per share of common stock:
Net income, as reported.......................................   $    0.94   $    1.06        $   1.89    $   2.06
Add back:     goodwill amortization...........................         --         0.04             --         0.08
                                                                 ---------   ---------        ---------   --------
         Adjusted net income..................................   $    0.94   $    1.10        $   1.89    $   2.14
                                                                 =========   =========        ========    ========

Diluted results per share of common stock:
Net income, as reported.......................................   $    0.92   $    1.03        $   1.84    $   2.01
Add back:     goodwill amortization...........................         --         0.04             --         0.08
                                                                 ---------   ---------        ---------   --------
         Adjusted net income..................................   $    0.92   $    1.07        $   1.84    $   2.09
                                                                 =========   =========        ========    ========
</TABLE>






                                      -7-
<PAGE>


                  DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)


NOTE A - SIGNIFICANT ACCOUNTING POLICIES - (CONTINUED)

In April 2002, the Financial Accounting Standards Board ("FASB") issued SFAS No.
145, "Rescission of FASB Statements No. 4, 44, and 62, Amendment of FASB
Statement No. 13, and Technical Corrections." SFAS 145 is required to be adopted
for fiscal years beginning after May 15, 2002. SFAS 145 rescinds SFAS 4, which
required all gains and losses from extinguishment of debt to be aggregated and,
if material, classified as an extraordinary item, net of the related income tax
effect. Accordingly, gains or losses from extinguishment of debt will be
classified as income or loss from continuing operations in the income statement
unless the extinguishment qualifies as an extraordinary item under the
provisions of Accounting Principles Board Opinion No. 30 ("APB 30"), "Reporting
the Results of Operations - Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions." Events or transactions that are both unusual in nature and
infrequent in occurrence are classified as extraordinary items under APB 30.
Upon adoption, any gain or loss on extinguishment of debt previously classified
as an extraordinary item in prior periods presented that does not meet the
criteria of APB 30 for such classification will be reclassified as required by
SFAS 145. For the six month period ending June 30, 2002 and 2001, the Company
had an extraordinary (loss) gain, net of the related income tax effect, of
$(0.2) million, or $(0.01) per diluted share, and $6.2 million, or $0.30 per
diluted share, respectively. The Company does not expect the adoption of SFAS
145 to have a material adverse impact on its consolidated financial position or
net income.


NOTE B - INVESTMENTS

At June 30, 2002, the Company had fixed maturity securities available for sale
with a carrying value and a fair value of $2,333.6 million and an amortized cost
of $2,336.5 million. At December 31, 2001, the Company had fixed maturity
securities available for sale with a carrying value and a fair value of $2,223.8
million and an amortized cost of $2,249.3 million.


NOTE C - SEGMENT INFORMATION

<TABLE>
<CAPTION>
                                                          Three Months Ended              Six Months Ended
                                                                June 30,                       June 30,
                                                       -------------------------       -------------------------
                                                         2002            2001            2002            2001
                                                       ---------       ---------       ---------       ---------
                                                                         (dollars in thousands)
<S>                                                    <C>             <C>             <C>             <C>
Revenues excluding net realized investment gains:
   Group employee benefit products ..................  $ 173,335       $ 138,507       $ 348,374       $ 277,490
   Asset accumulation products ......................     16,773          18,305          34,379          36,525
   Other (1) ........................................      5,345           5,134          10,591          10,302
                                                       ---------       ---------       ---------       ---------
                                                       $ 195,453       $ 161,946       $ 393,344       $ 324,317
                                                       =========       =========       =========       =========

Operating income (2):
   Group employee benefit products (3) ..............  $  30,680       $  28,943       $  61,033       $  58,478
   Asset accumulation products ......................      1,858           3,359           4,851           6,721
   Other (1) (3) ....................................       (970)         (1,206)         (2,579)         (2,498)
                                                       ---------       ---------       ---------       ---------
                                                       $  31,568       $  31,096       $  63,305       $  62,701
                                                       =========       =========       =========       =========
</TABLE>

(1)    Consists of operations that do not meet the quantitative thresholds for
       determining reportable segments and includes integrated disability and
       absence management services and certain corporate activities.

(2)    Income excluding net realized investment gains and before interest and
       income tax expense and extraordinary (loss) gain.

(3)    Operating income for group employee benefits and other operations
       includes amortization of goodwill of $0.4 million and $0.4 million,
       respectively, for the second quarter of 2001, and $0.9 million and $0.7
       million, respectively, for the first half of 2001.


NOTE D - REPURCHASE OF SENIOR NOTES

The Company repurchased $10.5 million aggregate principal amount of its 8%
Senior Notes due 2003 at various times during the second quarter of 2002. The
Company recognized an extraordinary loss of $0.2 million, net of an income tax
benefit of $0.1 million, in connection with these repurchases.



                                      -8-
<PAGE>


                  DELPHI FINANCIAL GROUP, INC. AND SUBSIDIARIES
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (CONTINUED)
                                   (UNAUDITED)

NOTE E - COMPUTATION OF RESULTS PER SHARE

The following table sets forth the calculation of basic and diluted results per
share:

<TABLE>
<CAPTION>
                                                                    Three Months Ended          Six Months Ended
                                                                         June 30,                   June 30,
                                                                  ----------------------     ----------------------
                                                                     2002         2001         2002         2001
                                                                  ---------     --------     --------     ---------
                                                                    (dollars in thousands, except per share data)
<S>                                                               <C>           <C>          <C>          <C>
Numerator:
   Income before extraordinary (loss) gain....................    $  19,732     $ 18,472     $ 39,302     $  36,100
   Extraordinary (loss) gain, net of income taxes.............         (216)       3,196         (216)        6,213
                                                                  ---------     --------     --------     ---------
         Net income...........................................    $  19,516     $ 21,668     $ 39,086     $  42,313
                                                                  =========     ========     ========     =========

Denominator:
   Weighted average common shares outstanding.................       20,728       20,534       20,708        20,531
   Effect of dilutive securities..............................          594          544          530           553
                                                                  ---------     --------     --------     ---------
   Weighted average common shares outstanding,
     assuming dilution........................................       21,322       21,078       21,238        21,084
                                                                  =========     ========     ========     =========

Basic results per share of common stock:
   Income before extraordinary (loss) gain....................    $    0.95     $   0.90     $   1.90     $   1.76
   Extraordinary (loss) gain, net of income taxes.............        (0.01)        0.16        (0.01)        0.30
                                                                  ---------     --------     --------     --------
         Net income...........................................    $    0.94     $   1.06     $   1.89     $   2.06
                                                                  =========     ========     ========     ========

Diluted results per share of common stock:
    Income before extraordinary (loss) gain...................    $    0.93     $   0.88     $   1.85     $   1.71
    Extraordinary (loss) gain, net of income taxes............        (0.01)        0.15        (0.01)        0.30
                                                                  ---------     --------     --------     --------
         Net income...........................................    $    0.92     $   1.03     $   1.84     $   2.01
                                                                  =========     ========     ========     ========
</TABLE>


NOTE F - CONTINGENCIES

In the course of its business, the Company is a party to litigation and other
proceedings, primarily involving its insurance operations. In some cases, these
proceedings entail claims against the Company for punitive damages and similar
types of relief. The ultimate disposition of such pending litigation and
proceedings is not expected to have a material adverse effect on the Company's
consolidated financial position. In addition, incident to certain of its
discontinued products, the Company is currently a party to two separate
arbitrations arising out of two accident and health reinsurance arrangements in
which it and other companies formerly were participating reinsurers. At issue in
both arbitrations, among other things, is whether certain reinsurance risks were
validly ceded to the Company. These arbitrations are in their earliest stages,
and their ultimate resolutions are likely to require extended periods of time.
While management believes that in both cases the Company has substantial legal
grounds for avoiding the reinsurance risks at issue, it is not at this time
possible to predict the ultimate outcome of these arbitrations, nor is it
feasible to provide reasonable ranges of potential losses. In the opinion of
management, such arbitrations, when ultimately resolved, will not individually
or collectively have a material adverse effect on the Company's consolidated
financial position.





                                      -9-
<PAGE>




                          DELPHI FINANCIAL GROUP, INC.
                     MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                  FINANCIAL CONDITION AND RESULTS OF OPERATIONS

GENERAL

The following is an analysis of the results of operations and financial
condition of Delphi Financial Group, Inc. (the "Company," which term includes
the Company and its consolidated subsidiaries unless the context indicates
otherwise). This analysis should be read in conjunction with the Consolidated
Financial Statements and related notes included in this document, as well as the
Company's annual report on Form 10-K for the year ended December 31, 2001.
Capitalized terms used herein without definition have the meanings ascribed to
them in the Company's annual report on Form 10-K for the year ended December 31,
2001.

RESULTS OF OPERATIONS

Six Months Ended June 30, 2002 Compared to
Six Months Ended June 30, 2001

Premium and Fee Income. Premium and fee income for the first half of
2002 was $313.2 million as compared to $245.8 million for the first half of
2001, an increase of 27%. Premiums from core group employee benefit products
increased 21% to $265.6 million in the first half of 2002 from $219.1 million
in the first half of 2001. This increase reflects normal growth in employment
and salary levels for the Company's existing customer base, price increases and
strong production of new business. Within core group employee benefit products,
excess workers' compensation premiums increased 34% to $46.2 million in the
first half of 2002 from $34.4 million in the first half of 2001 primarily due
to improvements in the pricing environment in this market sector and increased
demand due to higher primary workers' compensation rates. SNCC has been able to
obtain significant price increases in connection with its renewals of insurance
coverage during 2002. As to a substantial portion of such renewals, such price
increases exceeded 20%. SNCC has also been obtaining significant improvements
in contract terms, in particular higher self-insured retention levels, in
connection with these renewals. In addition, new business production for excess
workers' compensation products increased 137% to $15.3 million in the first
half of 2002 from $6.5 million in the first half of 2001 and the retention of
existing customers has been satisfactory. New business production for the
Company's other core group employee benefit products increased 62% to $90.5
million in the first half of 2002 from $55.8 million in the first half of 2001
primarily due to the expansion of the Company's sales force during 2001 and the
opening of three new sales offices in the first half of 2002. Retention of
existing customers for these products also improved during the first half of
2002 and price increases continue to be implemented for certain disability
customers. Premiums from non-core group employee benefit products increased
113% to $38.5 million in the first half of 2002 from $18.1 million in the first
half of 2001 primarily due to a higher level of premium from loss portfolio
transfers, which are episodic in nature. Deposits from the Company's asset
accumulation products were $37.0 million in the first half of 2002 as compared
to $42.1 million in the first half of 2001. Deposits for these products, which
are long-term in nature, are not recorded as premiums; instead, the deposits
are recorded as a liability. The Company has maintained its disciplined
approach to setting the crediting rates offered on its asset accumulation
products since market interest rates and the resulting interest rate spreads
available to the Company on these products remained less favorable throughout
2001 and the first half of 2002. Accordingly, the Company experienced a lower
level of production from its asset accumulation business in the first half of
2002 as compared to the first half of 2001.

Net Investment Income. Net investment income for the first half of 2002 was
$80.2 million as compared to $78.5 million for the first half of 2001, an
increase of 2%. This increase primarily reflects an increase in average invested
assets in 2002, partially offset by a decrease in the tax equivalent weighted
average annualized yield. The tax equivalent weighted average annualized yield
on invested assets was 6.7% on average invested assets of $2,492.7 million in
the first half of 2002 and 6.9% on average invested assets of $2,338.8 million
in the first half of 2001.

Net Realized Investment Gains. Net realized investment gains were $0.3 million
in the first half of 2002 as compared to $0.7 million in the first half of 2001.
The Company's investment strategy results in periodic sales of securities and
the recognition of realized investment gains and losses. The Company monitors
its investments on an ongoing basis. When the market value of a security
declines below its cost, and such decline is determined to be other than
temporary, the security is written down to fair value. In the first half of 2002
and 2001, the Company recognized $9.5 million and $0.6 million, respectively, of
losses due to the other than temporary declines in the market values of certain
fixed maturity securities.

During the months of June and July of 2002, due to credit quality-related
deterioration in the corporate debt markets, declines in value occurred in
certain portions of the Company's investment portfolio. The Company is presently
monitoring the affected securities pursuant to its procedures for evaluation for
other than temporary impairment in valuation. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Forward-Looking
Statements and Cautionary Statements Regarding Certain Factors That May Affect
Future Results" for a description of these procedures, which take into account
a number of



                                      -10-
<PAGE>


factors. While it is not possible to predict the extent of any future changes in
value, positive or negative, or the results of the future application of these
procedures, with respect to these securities, the Company presently estimates
that if the existing declines in value were determined to be other than
temporary, the Company would recognize realized investment losses in the range
of $10 to $15 million, on an after-tax basis, with respect to these securities.
There can be no assurance that the Company will experience realized investment
gains in the future in an amount sufficient to offset any such losses.

Benefits and Expenses. Policyholder benefits and expenses for the first half of
2002 were $330.0 million as compared to $261.6 million in the first half of
2001, an increase of 26%. This increase primarily reflects the increase in
premiums from the Company's group employee benefit products discussed above. The
combined ratio (loss ratio plus expense ratio) for the Company's group employee
benefits segment was 94.5% in the first half of 2002 and 92.3% for the
comparable period of 2001. This increase was primarily due to a higher level of
premium from loss portfolio transfers, which carry a higher loss ratio, and a
higher loss ratio in the Company's excess workers' compensation business.

Interest Expense and Extraordinary (Loss) Gain. Interest expense was
$6.4 million in the first half of 2002 as compared to $10.1 million in the
first half of 2001, a decrease of $3.7 million. This decrease was primarily a
result of the Company's repurchase of $64.0 million liquidation amount of the
Capital Securities in the open market, which occurred on various dates during
the first nine months of 2001, and a lower weighted average borrowing rate
under the Company's revolving credit facilities during the first half of 2002.
In addition, the Company had a lower amount of borrowings outstanding under its
Senior Notes, SIG Senior Notes and revolving credit facilities during the first
half of 2002. During the first half of 2001, the Company repurchased $54.0
million liquidation amount of the Capital Securities. In addition, the Company
repurchased $8.0 million aggregate principal amount of the Senior Notes in June
2001. The Company recognized an extraordinary gain of $6.2 million, net of
income tax expense of $3.3 million, in connection with these repurchases. In
the second quarter of 2002, the Company repurchased $10.5 million aggregate
principal amount of the Senior Notes, resulting in an extraordinary loss of
$0.2 million, net of an income tax benefit of $0.1 million.

Income before Extraordinary (Loss) Gain. Management believes that the
calculation of "operating earnings" is informative when analyzing the Company's
operating trends and in comparing the Company's performance with that of other
companies in its industry. Operating earnings exclude discretionary or
nonrecurring items of income or loss such as realized investment gains and
losses and extraordinary items. Investment gains and losses may be realized
based on management's decision to dispose of an investment or management's
judgment that a decline in the market value of an investment is other than
temporary. Therefore, realized investment gains and losses do not represent
elements of the Company's ongoing earnings capacity. However, operating earnings
should not be considered a substitute for net income as an indication of the
Company's overall performance and may not be calculated in the same manner as
similarly titled captions in other companies' financial statements. Operating
earnings for the Company, consisting of income before extraordinary (loss) gain
adjusted to exclude realized investment gains (net of the related income tax
expense), were $39.1 million, or $1.84 per diluted share, in the first half of
2002 as compared to $35.7 million, or $1.69 per diluted share, in the first half
of 2001. The increase in operating earnings is primarily attributable to the
decrease in interest expense discussed above.

Three Months Ended June 30, 2002 Compared to
Three Months Ended June 30, 2001

Premium and Fee Income. Premium and fee income for the second quarter
of 2002 was $156.3 million as compared to $122.5 million for the second quarter
of 2001, an increase of 28%. Premiums from core group employee benefit products
increased 25% to $136.4 million in the second quarter of 2002 from $109.4
million in the second quarter of 2001. This increase reflects normal growth in
employment and salary levels for the Company's existing customer base, price
increases and strong production of new business. Within core group employee
benefit products, excess workers' compensation premiums increased 45% to $23.3
million in the second quarter of 2002 from $16.0 million in the second quarter
of 2001 primarily due to improvements in the pricing environment in this market
sector and increased demand due to higher primary workers' compensation rates.
SNCC has been able to obtain significant price increases in connection with its
renewals of insurance coverage during 2002. As to a substantial portion of such
renewals, such price increases exceeded 20%. SNCC has also been obtaining
significant improvements in contract terms, in particular higher self-insured
retention levels, in connection with these renewals. In addition, new business
production for excess workers' compensation products increased 122% to $5.0
million in the second quarter of 2002 from $2.3 million in the second quarter
of 2001 and the retention of existing customers has been satisfactory. New
business production for the Company's other core group employee benefit
products increased 36% to $37.3 million in the second quarter of 2002 from
$27.4 million in the second quarter of 2001 primarily due to the expansion of
the Company's sales force during 2001 and the opening of three new sales
offices in 2002. Retention of existing customers for these products also
improved during the second quarter of 2002 and price increases continue to be
implemented for certain disability customers. Premiums from non-core group
employee benefit products increased 74% to $15.3 million in the second quarter
of 2002 from $8.8 million in the second quarter of 2001 primarily due to a
higher level of premium from loss portfolio transfers, which are


                                      -11-
<PAGE>


episodic in nature. Deposits from the Company's asset accumulation products were
$21.9 million in the second quarter of 2002 as compared to $13.4 million in the
second quarter of 2001. Deposits for these products, which are long-term in
nature, are not recorded as premiums; instead, the deposits are recorded as a
liability. The Company has maintained its disciplined approach to setting the
crediting rates offered on its asset accumulation products since market interest
rates and the resulting interest rate spreads available to the Company on these
products remained less favorable throughout 2001 and the first half of 2002.

Net Investment Income. Net investment income for the second quarter of 2002 was
$39.1 million as compared to $39.4 million for the second quarter of 2001. This
decrease primarily reflects a decrease in the tax equivalent weighted average
annualized yield on invested assets in 2002, partially offset by an increase in
average invested assets. The tax equivalent weighted average annualized yield on
invested assets was 6.3% on average invested assets of $2,567.6 million in the
second quarter of 2002 and 7.0% on average invested assets of $2,310.6 million
in the second quarter of 2001.

Net Realized Investment Gains. Net realized investment gains for the second
quarter of 2002 and 2001 were $0.2 million. The Company's investment strategy
results in periodic sales of securities and the recognition of realized
investment gains and losses. The Company monitors its investments on an ongoing
basis. When the market value of a security declines below its cost, and such
decline is determined to be other than temporary, the security is written down
to fair value. In the second quarter of 2002 and 2001, the Company recognized
$5.9 million and $0.6 million, respectively, of losses due to the other than
temporary declines in the market values of certain fixed maturity securities.

During the months of June and July of 2002, due to credit quality-related
deterioration in the corporate debt markets, declines in value occurred in
certain portions of the Company's investment portfolio. The Company is presently
monitoring the affected securities pursuant to its procedures for evaluation for
other than temporary impairment in valuation. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations - Forward-Looking
Statements and Cautionary Statements Regarding Certain Factors That May Affect
Future Results" for a description of these procedures, which take into account a
number of factors. While it is not possible to predict the extent of any future
changes in value, positive or negative, or the results of the future application
of these procedures, with respect to these securities, the Company presently
estimates that if the existing declines in value were determined to be other
than temporary, the Company would recognize realized investment losses in the
range of $10 to $15 million, on an after-tax basis, with respect to these
securities. There can be no assurance that the Company will experience realized
investment gains in the future in an amount sufficient to offset any such
losses.

Benefits and Expenses. Policyholder benefits and expenses for the second quarter
of 2002 were $163.9 million as compared to $130.9 million in the second quarter
of 2001, an increase of 25%. This increase primarily reflects the increase in
premiums from the Company's group employee benefit products discussed above. The
combined ratio (loss ratio plus expense ratio) for the Company's group employee
benefits segment was 94.0% in the second quarter of 2002 and 92.7% for the
comparable period of 2001. This increase was primarily due to a higher level of
premium from loss portfolio transfers, which carry a higher loss ratio, and a
higher loss ratio in the Company's excess workers' compensation business.

Interest Expense and Extraordinary (Loss) Gain. Interest expense was
$3.1 million in the second quarter of 2002 as compared to $4.1 million in the
second quarter of 2001, a decrease of $1.0 million. This decrease was primarily
a result of the Company's repurchase of $64.0 million liquidation amount of the
Capital Securities in the open market, which occurred on various dates during
the first nine months of 2001. In addition, the Company had a lower amount of
borrowings outstanding under its Senior Notes and SIG Senior Notes due to
repurchases or scheduled principal repayments during 2001 and 2002. During the
second quarter of 2001, the Company repurchased $32.7 million liquidation
amount of the Capital Securities. In addition, the Company repurchased $8.0
million aggregate principal amount  of the Senior Notes in June 2001. The
Company recognized an extraordinary gain of $3.2 million, net of income tax
expense of $1.7 million, in connection with these repurchases. In the second
quarter of 2002, the Company repurchased $10.5 million aggregate principal
amount of the Senior Notes, resulting in an extraordinary loss of $0.2 million,
net of an income tax benefit of $0.1 million.

Income before Extraordinary (Loss) Gain. Management believes that the
calculation of "operating earnings" is informative when analyzing the Company's
operating trends and in comparing the Company's performance with that of other
companies in its industry. Operating earnings exclude discretionary or
nonrecurring items of income or loss such as realized investment gains and
losses and extraordinary items. Investment gains and losses may be realized
based on management's decision to dispose of an investment or management's
judgment that a decline in the market value of an investment is other than
temporary. Therefore, realized investment gains and losses do not represent
elements of the Company's ongoing earnings capacity. However, operating earnings
should not be considered a substitute for net income as an indication of the
Company's overall performance and may not be calculated in the same manner as
similarly titled captions in other companies' financial statements. Operating
earnings for the Company, consisting of income before extraordinary (loss) gain
adjusted to exclude realized investment gains (net of the related income tax
expense), were $19.6 million, or $0.92 per diluted share, in the second quarter
of 2002 as compared to $18.3 million, or $0.87 per diluted share, in the second
quarter of 2001. The increase in operating earnings is primarily attributable to
the decrease in interest expense discussed above.


                                      -12-
<PAGE>


LIQUIDITY AND CAPITAL RESOURCES

General. The Company had approximately $61.6 million of financial resources
available at the holding company level at June 30, 2002, which was primarily
comprised of investments in the common stock of its investment subsidiaries. The
assets of the investment subsidiaries are primarily invested in fixed maturity
securities and balances with independent investment managers. Other sources of
liquidity at the holding company level include dividends paid from subsidiaries,
primarily generated from operating cash flows and investments. The Company's
insurance subsidiaries are permitted, without prior regulatory or other
approval, to make dividend payments of $44.1 million during 2002, of which $10.3
million has been paid during the first half of 2002. In general, dividends from
the Company's non-insurance subsidiaries are not subject to regulatory or other
restrictions. At June 30, 2002, the Company had $149.0 million of borrowings
available to it under its revolving credit facilities.

The Company's current liquidity needs, in addition to funding lease commitments
and other operating expenses, include principal and interest payments on
outstanding borrowings under its revolving credit facilities, the Senior Notes,
the SIG Senior Notes and the Subordinated Notes and distributions on the Capital
Securities. The maximum amount of borrowings available under the Company's
revolving credit facilities, which expire in April 2003, is currently $190.0
million and will be reduced to $140.0 million in October 2002. During the second
quarter of 2002, the Company repurchased $10.5 million aggregate principal
amount of the Senior Notes. The Senior Notes mature in their entirety in October
2003 and are not subject to any sinking fund requirements nor are they
redeemable prior to maturity. A $9.0 million annual principal installment was
paid on the SIG Senior Notes in May 2002, and the notes will mature in their
entirety in May 2003. The Subordinated Notes mature in their entirety in June
2003. The junior subordinated debentures underlying the Capital Securities are
not redeemable prior to March 25, 2007.

The Company's shelf registration statement for the sale, from time to time, of
securities was declared effective by the Securities and Exchange Commission on
May 6, 2002. This shelf registration increased the Company's existing $49.2
million shelf registration to an amount of up to $250.0 million of proceeds.
Subject to market conditions, the securities covered by such shelf registration
may be issued in connection with, among other things, the Company's intended
refinancing of its revolving credit facilities and its Senior Notes prior to
maturity.

Sources of liquidity available to the Company and its subsidiaries are expected
to exceed their current and long-term cash requirements.

MARKET RISK

There have been no material changes in the Company's exposure to market risk or
its management of such risk since December 31, 2001.

FORWARD-LOOKING STATEMENTS AND CAUTIONARY STATEMENTS REGARDING CERTAIN FACTORS
THAT MAY AFFECT FUTURE RESULTS

In connection with, and because it desires to take advantage of, the "safe
harbor" provisions of the Private Securities Litigation Reform Act of 1995, the
Company cautions readers regarding certain forward-looking statements in the
above "Management's Discussion and Analysis of Financial Condition and Results
of Operations" and elsewhere in this Form 10-Q and in any other statement made
by, or on behalf of, the Company, whether in future filings with the Securities
and Exchange Commission or otherwise. Forward-looking statements are statements
not based on historical information and which relate to future operations,
strategies, financial results, prospects, outlooks or other developments. Some
forward-looking statements may be identified by the use of terms such as
"expects," "believes," "anticipates," "intends," "judgment" or other similar
expressions. Forward-looking statements are necessarily based upon estimates and
assumptions that are inherently subject to significant business, economic,
competitive and other uncertainties and contingencies, many of which are beyond
the Company's control and many of which, with respect to future business
decisions, are subject to change. Examples of such uncertainties and
contingencies include, among other important factors, those affecting the
insurance industry generally, such as the economic and interest rate
environment, federal and state legislative and regulatory developments,
including but not limited to changes in financial services and tax laws and
regulations, market pricing and competitive trends relating to insurance
products and services, acts of terrorism, and the availability and cost of
reinsurance, and those relating specifically to the Company's business, such as
the level of its insurance premiums and fee income, the claims experience,
persistency and other factors affecting the profitability of its insurance
products, the performance of its investment portfolio and changes in the
Company's investment strategy, acquisitions of companies or blocks of business,
and ratings by major rating organizations of its insurance subsidiaries. These
uncertainties and contingencies can affect actual results and could cause actual
results to differ materially from those expressed in any forward-looking
statements made by, or on behalf of, the Company. Certain of these uncertainties
and contingencies are described in more detail in the remainder of this section.
The Company disclaims any obligation to update forward-looking information.


                                      -13-
<PAGE>



     RESERVES ESTABLISHED FOR FUTURE POLICY BENEFITS AND CLAIMS MAY PROVE
INADEQUATE.

The Company establishes reserves for future policy benefits and unpaid claims
and claim expenses relating to the Company's insurance products. These reserves
are calculated using various generally recognized actuarial methodologies and
are based upon assumptions that management believes are appropriate and which
vary by type of product. The estimation process is complex and involves
information obtained from company-specific and industry-wide data, as well as
general economic information. The most significant assumptions made in the
estimation process for future policy benefits relate to mortality, morbidity,
claim termination and interest rates. The reserves for unpaid claims and claim
expenses are determined on an individual basis for reported claims and estimates
of incurred but not reported losses are developed on the basis of past
experience. The most significant assumptions made in the estimation process for
unpaid claims and claim expenses are the trend in loss costs, the expected
frequency and severity of claims, changes in the timing of the reporting of
losses from the loss date to the notification date, and expected costs to settle
unpaid claims. The assumptions vary based on the year the claim is incurred.
Disability reserves for unpaid claims and claim expenses are discounted using
interest rate assumptions based upon projected portfolio yield rates for the
assets supporting the liabilities. The assets selected to support these
liabilities produce cash flows that are intended to match the timing and amount
of anticipated liability payments. Workers' compensation claim reserves are
discounted using interest rate assumptions based on the risk-free rate of return
for U.S. Government securities with a duration comparable to the expected
duration and payment pattern of the claims at the time the claims are settled.
The methods for establishing such estimates and the resulting liabilities are
continually reviewed and updated based on current circumstances, and any
resulting adjustments are reflected in earnings currently.

The Company's projected ultimate insurance liabilities and associated reserves
are estimates. As estimates, these values are subject to variability. This
variability arises because the factors and events affecting the ultimate
liability for claim reserves have not all taken place, and thus cannot be
evaluated with absolute certainty. Moreover, under the actuarial methodologies
discussed above, these estimates are subject to reevaluation based on developing
trends with respect to the Company's loss experience. Such trends may emerge
over longer periods of time, and changes in such trends cannot necessarily be
identified or predicted at any given time by reference to current claims
experience, whether favorable or unfavorable. If the Company's actual loss
experience is different from the Company's assumptions or estimates, the
Company's reserves could be inadequate. In such event, the Company's results of
operations, liquidity or financial condition could be materially adversely
affected.

     THE MARKET VALUES OF THE COMPANY'S INVESTMENTS FLUCTUATE.

The market values of the Company's investments vary depending on economic and
market conditions, including interest rates, and such values can decline as a
result of changes in such conditions. Increasing interest rates, for example,
will typically have an adverse impact on the market values of the fixed maturity
securities in the Company's investment portfolio. If interest rates decline, the
Company generally achieves a lower overall rate of return on investments of cash
generated from the Company's operations. In addition, in the event that
investments are called or mature in a declining interest rate environment, the
Company may be unable to reinvest the proceeds in securities with comparable
interest rates. The Company may also be required in the future to sell certain
investments at a price and a time when the market value of such investments is
less than the book value of such investments.

Declines in the fair value of investments that are considered to be other than
temporary are reported as realized investment losses, even if the investments
are not sold. The Company evaluates, among other things, the financial position
and prospects of the issuer, conditions in the issuer's industry and geographic
area, liquidity of the investment, changes in the amount or timing of expected
future cash flows from the investment, and recent downgrades of the issuer by a
rating agency to determine if and when a decline in the fair value of an
investment below amortized cost is other than temporary. The length of time and
extent to which the fair value of the investment is lower than its amortized
cost and the Company's ability and intent to retain the investment to allow for
any anticipated recovery in the investment's fair value are also considered. The
Company may experience losses from other than temporary security value declines
in the future, which would be recorded as realized investment losses in the
income statement. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations - Six Months Ended June 30, 2002 Compared to
Six Months Ended June 30, 2001."

     THE COMPANY'S INVESTMENT AND FINANCING STRATEGY EXPOSES THE COMPANY TO
DEFAULT, PREPAYMENT, EXTENSION AND OTHER RISKS.

The management of the Company's investment portfolio is an important component
of the Company's profitability since a substantial portion of the Company's
operating income is generated from the difference between the yield achieved on
invested assets and the interest credited on policyholder funds and reserves.



                                      -14-
<PAGE>


The Company is subject to the risk that the issuers of the fixed maturity
securities the Company owns will default on principal and interest payments. A
major economic downturn or any of the various other factors that affect issuers'
ability to pay could result in issuer defaults. Because the Company's
investments consist primarily of fixed maturity securities and short-term
investments, such defaults could materially adversely affect the Company's
results of operations, liquidity or financial condition. The Company continually
monitors its investment portfolio and attempts to ensure that the risks
associated with concentrations of investments in either a particular sector of
the market or a single entity are limited.

At June 30, 2002, approximately 26% of the Company's total invested assets were
comprised of mortgage-backed securities, of which approximately 45% are
guaranteed by U.S. Government sponsored entities as to the full amount of
principal and interest and the remaining 55% consists of investments in trusts
created by banks and finance and mortgage companies. Mortgage-backed securities
subject the Company to a degree of interest rate risk, including prepayment and
extension risk, which is generally a function of the sensitivity of each
security's underlying collateral to prepayments under varying interest rate
environments and the repayment priority of the securities in the particular
securitization structure.

The Company maintains a program in which investments are financed using advances
from various Federal Home Loan Banks. At June 30, 2002, the Company had
outstanding advances of $197.0 million, of which $35.0 million were obtained
during 2002. These advances, of which $185.0 million were obtained at a fixed
rate and $12.0 million were obtained at a variable rate, have a weighted average
term to maturity of 6.2 years. In addition, the Company has utilized reverse
repurchase agreements, futures and option contracts and interest rate swap
contracts from time to time in connection with the Company's investment
strategy. These transactions require the Company to maintain securities or cash
on deposit with the applicable counterparty as collateral. As the market value
of the collateral or contracts changes, the Company may be required to deposit
additional collateral.

The ability of the Company's insurance subsidiaries to make investments is
subject to the insurance laws and regulations of their respective states of
domicile. Each of these states has comprehensive investment regulations. In
addition, the Company's revolving credit facilities and the SIG Senior Notes
also contain limitations on the composition of the Company's investment
portfolio.

     THE COMPANY'S FINANCIAL POSITION EXPOSES THE COMPANY TO INTEREST RATE
RISKS.

Because the Company's primary assets and liabilities are financial in nature,
the Company's consolidated financial position and earnings are subject to risks
resulting from changes in interest rates. The Company manages this risk by
active portfolio management focusing on minimizing its exposure to fluctuations
in interest rates by matching its invested assets and related liabilities and by
periodically adjusting the crediting rates on its annuity products.

     THE COMPANY'S ABILITY TO REDUCE ITS EXPOSURE TO RISKS DEPENDS ON THE
AVAILABILITY AND COST OF REINSURANCE.

The Company transfers its exposure to some risks through reinsurance
arrangements with other insurance and reinsurance companies. Under the Company's
reinsurance arrangements, another insurer assumes a specified portion of the
Company's losses and loss adjustment expenses in exchange for a specified
portion of policy premiums. The availability, amount and cost of reinsurance
depend on market conditions and may vary significantly. Any decrease in the
amount of the Company's reinsurance will increase the Company's risk of loss.
Furthermore, the Company is subject to credit risk with respect to reinsurance.
The Company obtains reinsurance primarily through indemnity reinsurance
transactions in which the Company is still liable for the transferred risks if
the reinsurers fail to meet their financial obligations. Such failures could
materially affect the Company's results of operations, liquidity or financial
condition.

Some reinsurers experienced significant losses related to the terrorist events
of September 11, 2001. As a result, higher prices and less favorable terms and
conditions are presently being offered in the reinsurance market. Also, there
has been significantly reduced availability of reinsurance covering risks such
as terrorist and catastrophic events. Accordingly, substantially all of the
Company's coverages of this nature have been or, unless significant improvements
in availability of such coverages occur, will be discontinued during the
present year. There can be no assurance that the Company will be able to obtain
such coverages on favorable terms in the future. In addition, while federal
legislation is presently being considered that would potentially provide
insurers with some degree of protection in the event of terrorism-related
losses, there can be no assurance that such legislation will be enacted or as to
its effect on the Company if enacted.

     THE INSURANCE BUSINESS IS A HEAVILY REGULATED INDUSTRY.

The Company's insurance subsidiaries, like other insurance companies, are highly
regulated by state insurance authorities in the states in which they are
domiciled and the other states in which they conduct business. Such regulations,
among other things, limit the amount of dividends and other payments that can be
made by such subsidiaries without prior regulatory approval and


                                      -15-
<PAGE>


impose restrictions on the amount and type of investments such subsidiaries may
have. These regulations also affect many other aspects of the Company's
insurance subsidiaries' businesses, including, for example, risk-based capital
requirements, various reserve requirements, the terms, conditions and manner of
sale and marketing of insurance products and the form and content of required
financial statements. These regulations are intended to protect policyholders
rather than investors. The ability of the Company's insurance subsidiaries to
continue to conduct their businesses is dependent upon the maintenance of their
licenses in these various states.

From time to time, increased scrutiny has been placed upon the insurance
regulatory framework, and a number of state legislatures have considered or
enacted legislative measures that alter, and in many cases increase, state
authority to regulate insurance companies. In addition to legislative
initiatives of this type, the National Association of Insurance Commissioners
and insurance regulators are continuously involved in a process of reexamining
existing laws and regulations and their application to insurance companies.
Furthermore, while the federal government currently does not directly regulate
the insurance business, federal legislation and administrative policies in a
number of areas, such as employee benefits regulation, age, sex and
disability-based discrimination, financial services regulation and federal
taxation, can significantly affect the insurance business. It is not possible to
predict the future impact of changing regulation on the operations of the
Company and those of its insurance subsidiaries.

The Company's insurance subsidiaries can also be required, under solvency or
guaranty laws of most states in which they do business, to pay assessments to
fund policyholder losses or liabilities of insurance companies that become
insolvent.

     THE FINANCIAL SERVICES INDUSTRY IS HIGHLY COMPETITIVE.

The Company competes with numerous other insurance and financial services
companies. Many of these organizations have substantially greater assets,
higher ratings from rating agencies, larger and more diversified portfolios of
insurance products and larger agency sales operations. Competition in asset
accumulation product markets is also encountered from the expanding number of
banks, securities brokerage firms and other financial intermediaries marketing
alternative savings products, such as mutual funds, traditional bank investments
and retirement funding alternatives.

     THE COMPANY MAY BE ADVERSELY IMPACTED BY A DECLINE IN THE RATINGS OF THE
COMPANY'S INSURANCE SUBSIDIARIES.

Ratings with respect to claims-paying ability and financial strength have become
an increasingly important factor impacting the competitive position of insurance
companies. Each of the rating agencies reviews its ratings of companies
periodically and there can be no assurance that current ratings will be
maintained in the future. Claims-paying and financial strength ratings are based
upon factors relevant to policyowners and are not directed toward protection of
investors. A downgrade in the ratings of the Company's insurance subsidiaries
could adversely affect sales of their products and could have a material adverse
effect on the results of the Company's operations.







                                      -16-
<PAGE>

                           PART II. OTHER INFORMATION

Item 4.  Submission of Matters to a Vote of Security Holders

         The Company held its Annual Meeting of Stockholders on May 14, 2002.
         The directors elected at the meeting will serve for a term ending on
         the date of the 2003 Annual Meeting of Stockholders. The directors
         elected at the meeting were Thomas L. Rhodes, Robert Rosenkranz, Edward
         A. Fox, Charles P. O'Brien, Lewis S. Ranieri, Robert M. Smith, Jr., and
         B.K. Werner. One director is voted upon by the Class A stockholders,
         voting separately as a class. At the 2002 Annual Meeting that director
         was Mr. Rhodes.

         The voting results for all matters at the meeting were as follows:

         1)   Election of Directors
<TABLE>
<CAPTION>
                                                               VOTES
                                                     --------------------------
                                                                      Withhold
                                                        For           Authority
                                                     ----------       ---------
<S>                                                  <C>              <C>
            Class A Director:
                 Thomas L. Rhodes.................   14,314,234         443,129
            Directors:
                 Robert Rosenkranz................   29,165,122       2,326,581
                 Edward A. Fox....................   31,048,656         443,047
                 Charles P. O'Brien...............   31,057,520         434,183
                 Lewis S. Ranieri.................   31,028,346         463,357
                 Robert M. Smith, Jr..............   29,165,279       2,326,424
                 B.K. Werner......................   30,640,206         851,497
</TABLE>

         2)   All Other Matters - The proposal to amend the Company's Amended
              and Restated Directors Stock Option Plan received 26,734,449 votes
              for approval and 4,742,372 votes against approval, with 14,882
              votes abstaining. The proposal to increase the number of shares
              reserved for issuance under the Employee Stock Purchase Plan
              received 31,185,390 votes for approval and 286,240 votes against
              approval, with 20,073 votes abstaining. The proposal with regard
              to transacting such other business that properly comes before the
              meeting or any adjournment thereof received 26,718,475 votes for
              approval and 4,644,784 votes against approval, with 128,444 votes
              abstaining; however, no such other business came before the
              meeting.


Item 6.  Exhibits and Reports on Form 8-K

     (a) Exhibits

         10.1     Delphi Financial Group, Inc. Amended and Restated Directors
                  Stock Option Plan, as amended

         11       Computation of Results per Share of Common Stock (incorporated
                  by reference to Note E to the Consolidated Financial
                  Statements included elsewhere herein)

     (b) Reports on Form 8-K

         None.





                                      -17-
<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.


                                    DELPHI FINANCIAL GROUP, INC. (Registrant)



                                  /s/      ROBERT ROSENKRANZ
                                  ----------------------------------------------
                                  Robert Rosenkranz
                                  Chairman of the Board, President and
                                  Chief Executive Officer
                                  (Principal Executive Officer)



                                  /s/      THOMAS W. BURGHART
                                  ----------------------------------------------
                                  Thomas W. Burghart
                                  Vice President and Treasurer
                                  (Principal Accounting and Financial Officer)


Date:  August 14, 2002





                                      -18-
<PAGE>





                            CERTIFICATION PURSUANT TO
                             18 U.S.C SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002



In connection with the Quarterly Report of Delphi Financial Group, Inc. (the
"Company") on Form 10-Q for the quarter ending June 30, 2002 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), the
undersigned officers of the Company, certify, pursuant to 18 U.S.C Section 1350,
as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

         (1)   The Report fully complies with the requirements of Section 13 (a)
               or 15 (d) of the Securities Exchange Act of 1934; and

         (2)   The information contained in the Report fairly presents, in all
               material respects, the financial condition and results of
               operations of the Company.

The foregoing certification is being furnished solely pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002 (Chapter 63, Title 18 U.S.C. Section 1350(a) and
(b)) and is not a part of the Form 10-Q to which it refers.


/s/  ROBERT ROSENKRANZ

Robert Rosenkranz
Chairman of the Board, President and Chief Executive Officer
August 14, 2002


/s/  THOMAS W. BURGHART

Thomas W. Burghart
Vice President and Treasurer
August 14, 2002