<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 September 30, 2001
                               ------------------

[ ]  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 number,      (I.R.S. Employer Identification
  incorporation or organization)                  including area code)                         Number)


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





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 October 31, 2001, the Registrant had 16,256,354 shares of Class A Common
        Stock and 4,132,688 shares of Class B Common Stock outstanding.



<PAGE>

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


<TABLE>
<CAPTION>
                                                                                                       Page
                                                                                                       ----
<S>                                                                                                    <C>
PART I.    FINANCIAL INFORMATION

           Consolidated Statements of Income for the Three and Nine
             Months Ended September 30, 2001 and 2000...............................................     3

           Consolidated Balance Sheets at September 30, 2001 and
             December 31, 2000......................................................................     4

           Consolidated Statements of Shareholders' Equity for the
             Nine Months Ended September 30, 2001 and 2000..........................................     5

           Consolidated Statements of Cash Flows for the
             Nine Months Ended September 30, 2001 and 2000..........................................     6

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

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

PART II.   OTHER INFORMATION........................................................................    14
</TABLE>



                                      -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                 Nine Months Ended
                                                                           September 30,                     September 30,
                                                                    ---------------------------       ---------------------------
                                                                       2001             2000             2001             2000
                                                                    ----------       ----------       ----------       ----------
<S>                                                                 <C>              <C>              <C>              <C>
Revenue:
  Premium and fee income .....................................      $  127,068       $  120,961       $  372,886       $  345,843
  Net investment income ......................................          38,397           45,687          116,896          142,899
  Net realized investment losses .............................          (6,926)          (2,068)          (6,250)          (3,620)
                                                                    ----------       ----------       ----------       ----------
                                                                       158,539          164,580          483,532          485,122
                                                                    ----------       ----------       ----------       ----------
Benefits and expenses:
  Benefits, claims and interest credited to policyholders ....          96,972           88,225          276,841          255,900
  Commissions ................................................           9,595            9,745           29,561           28,983
  Amortization of cost of business acquired ..................           8,536            8,217           24,911           21,697
  Other operating expenses ...................................          23,172           19,712           68,578           60,601
                                                                    ----------       ----------       ----------       ----------
                                                                       138,275          125,899          399,891          367,181
                                                                    ----------       ----------       ----------       ----------

       Operating income ......................................          20,264           38,681           83,641          117,941

Interest expense:
  Corporate debt .............................................           2,539            5,357            9,013           16,096
  Dividends on Capital Securities of Delphi Funding L.L.C.....           1,072            2,328            4,737            6,983
                                                                    ----------       ----------       ----------       ----------
                                                                         3,611            7,685           13,750           23,079
                                                                    ----------       ----------       ----------       ----------

       Income before income tax expense and
           extraordinary gain ................................          16,653           30,996           69,891           94,862

Income tax expense ...........................................           5,081            9,694           22,219           29,358
                                                                    ----------       ----------       ----------       ----------

       Income before extraordinary gain ......................          11,572           21,302           47,672           65,504

Extraordinary gain, net of income taxes ......................           1,233                -            7,446                -
                                                                    ----------       ----------       ----------       ----------
       Net income ............................................      $   12,805       $   21,302       $   55,118       $   65,504
                                                                    ==========       ==========       ==========       ==========

Basic results per share of common stock:
  Income before extraordinary gain ...........................      $     0.56       $     1.05       $     2.32       $     3.22
  Net income .................................................            0.62             1.05             2.68             3.22

Diluted results per share of common stock:
  Income before extraordinary gain ...........................      $     0.55       $     1.01       $     2.26       $     3.11
  Net income .................................................            0.61             1.01             2.61             3.11

Dividend paid per share of common stock ......................      $     0.07       $        -       $     0.21       $        -
</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>
                                                                                             September 30,          December 31,
                                                                                                  2001                  2000
                                                                                             -------------          ------------
<S>                                                                                           <C>                   <C>
Assets:
   Investments:
       Fixed maturity securities, available for sale ................................         $  2,117,149          $  2,010,634
       Short-term investments .......................................................              132,619                43,749
       Other investments ............................................................              156,311               421,562
                                                                                              ------------          ------------
                                                                                                 2,406,079             2,475,945

   Cash .............................................................................               12,737                12,344
   Cost of business acquired ........................................................              161,826               156,556
   Reinsurance receivables ..........................................................              465,295               437,844
   Other assets .....................................................................              289,513               289,433
   Assets held in separate account ..................................................               71,948                67,888
                                                                                              ------------          ------------
       Total assets .................................................................         $  3,407,398          $  3,440,010
                                                                                              ============          ============


Liabilities and Shareholders' Equity:
   Future policy benefits ...........................................................         $    553,458          $    523,911
   Unpaid claims and claim expenses .................................................              671,387               646,233
   Policyholder account balances ....................................................              802,949               782,452
   Corporate debt ...................................................................              113,696               267,770
   Advances from Federal Home Loan Bank .............................................              142,857               149,409
   Other liabilities and policyholder funds .........................................              402,997               374,292
   Liabilities related to separate account ..........................................               61,928                57,750
                                                                                              ------------          ------------
       Total liabilities ............................................................            2,749,272             2,801,817
                                                                                              ------------          ------------

   Company-obligated mandatorily redeemable Capital Securities of Delphi
       Funding L.L.C. holding solely junior subordinated deferrable interest
       debentures of the Company ....................................................               36,050               100,000
                                                                                              ------------          ------------

   Shareholders' equity:
       Preferred Stock, $.01 par; 10,000,000 shares authorized ......................                    -                     -
       Class A Common Stock, $.01 par; 40,000,000 shares authorized;
           17,635,982 and 16,844,982 shares issued and outstanding, respectively ....                  176                   168
       Class B Common Stock, $.01 par; 20,000,000 shares authorized;
           4,132,688 and 4,839,072 shares issued and outstanding, respectively ......                   41                    48
       Additional paid-in capital ...................................................              368,775               366,834
       Net unrealized depreciation on investments ...................................              (20,621)              (53,622)
       Retained earnings ............................................................              324,914               274,060
       Treasury stock, at cost; 1,495,890 and 1,435,390 shares of
           Class A Common Stock, respectively .......................................              (51,209)              (49,295)
                                                                                              ------------          ------------
           Total shareholders' equity ...............................................              622,076               538,193
                                                                                              ------------          ------------
               Total liabilities and shareholders' equity ...........................         $  3,407,398          $  3,440,010
                                                                                              ============          ============
</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, 2000 ...............   $     163   $      52    $ 364,390   $(101,465)   $ 277,353    $ (39,076)   $ 501,417
                                                                                                                       ---------

Net income .............................           -           -            -           -       65,504            -       65,504
Increase in net unrealized
   depreciation on investments .........           -           -            -     (42,298)           -            -      (42,298)
                                                                                                                       ---------
Comprehensive income ...................                                                                                  23,206
Issuance of stock, exercise of stock
   options and share conversions .......           1           -        1,512           -            -            -        1,513
Acquisition of treasury stock ..........           -           -            -           -            -      (10,219)     (10,219)
                                           ---------   ---------    ---------   ---------    ---------    ---------    ---------

Balance, September 30, 2000 ............   $     164   $      52    $ 365,902   $(143,763)   $ 342,857    $ (49,295)   $ 515,917
                                           =========   =========    =========   =========    =========    =========    =========


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

Net income .............................           -           -            -           -       55,118            -       55,118
Decrease in net unrealized
   depreciation on investments .........           -           -            -      33,001            -            -       33,001
                                                                                                                       ---------
Comprehensive income ...................           -           -            -           -            -            -       88,119
Issuance of stock, exercise of stock
   options and share conversions .......           8          (7)       1,941           -            -            -        1,942
Acquisition of treasury stock ..........           -           -            -           -            -       (1,914)      (1,914)
Dividends paid on common stock .........           -           -            -           -       (4,264)           -       (4,264)
                                           ---------   ---------    ---------   ---------    ---------    ---------    ---------

Balance, September 30, 2001 ............   $     176   $      41    $ 368,775   $ (20,621)   $ 324,914    $ (51,209)   $ 622,076
                                           =========   =========    =========   =========    =========    =========    =========
</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>
                                                                                                      Nine Months Ended
                                                                                                        September 30,
                                                                                                 ----------------------------
                                                                                                   2001               2000
                                                                                                 ---------          ---------
<S>                                                                                              <C>                <C>
Operating activities:
    Net income .........................................................................         $  55,118          $  65,504
    Adjustments to reconcile net income to net cash provided (used)
          by operating activities:
       Change in policy liabilities and policyholder accounts ..........................            64,692             61,299
       Net change in reinsurance receivables and payables ..............................           (32,498)           (85,370)
       Amortization, principally the cost of business acquired and investments .........            12,186               (195)
       Deferred costs of business acquired .............................................           (37,572)           (38,531)
       Net realized losses on investments ..............................................             6,250              3,620
       Net change in trading account securities ........................................            29,806            (11,014)
       Net change in federal income tax liability ......................................            45,990             43,638
       Extraordinary gain ..............................................................            (7,446)                 -
       Other ...........................................................................           (12,434)           (46,043)
                                                                                                 ---------          ---------
          Net cash provided (used) by operating activities .............................           124,092             (7,092)
                                                                                                 ---------          ---------

Investing activities:
    Purchases of investments and loans made ............................................          (516,205)          (929,168)
    Sales of investments and receipts from repayment of loans ..........................           635,905            389,748
    Maturities of investments ..........................................................            22,305             16,575
    Net change in short-term investments ...............................................           (88,833)           315,373
    Sale of real estate ................................................................                 -             16,656
    Business acquisitions ..............................................................            (2,613)            (2,610)
    Change in deposit in separate account ..............................................               118               (656)
                                                                                                 ---------          ---------
          Net cash provided (used) by investing activities .............................            50,677           (194,082)
                                                                                                 ---------          ---------

Financing activities:
    Deposits to policyholder accounts ..................................................            67,157            121,816
    Withdrawals from policyholder accounts .............................................           (48,564)           (65,642)
    Proceeds from issuance of common stock and exercise of stock options ...............             1,942              1,513
    Dividends paid on common stock .....................................................            (4,264)                 -
    Acquisition of treasury stock ......................................................            (1,914)           (10,219)
    Borrowings under Credit Agreements .................................................            33,000             19,000
    Principal payments under Credit Agreements .........................................          (170,000)           (26,000)
    Principal payment under SIG Senior Notes ...........................................            (9,000)            (9,000)
    Repurchase of Senior Notes .........................................................            (8,284)                 -
    Change in liability for Federal Home Loan Bank advances ............................            (6,500)            73,500
    Repurchase of Capital Securities ...................................................           (51,329)                 -
    Change in liability for securities loaned or sold under agreements to repurchase ...            23,380             99,399
                                                                                                 ---------          ---------
          Net cash (used) provided by financing activities .............................          (174,376)           204,367
                                                                                                 ---------          ---------

Increase in cash .......................................................................               393              3,193
Cash at beginning of period ............................................................            12,344              7,808
                                                                                                 ---------          ---------
       Cash at end of period ...........................................................         $  12,737          $  11,001
                                                                                                 =========          =========
</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 those reflected in the
Company's report on Form 10-K for the year ended December 31, 2000. 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 nine
months ended September 30, 2001 are not necessarily indicative of the results
that may be expected for the year ended December 31, 2001. Certain
reclassifications have been made in the 2000 financial statements to conform to
the 2001 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, 2000. 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, 2000.

The Company uses short-term, highly liquid debt instruments purchased with
maturities of three months or less as part of its investment management program
and, as such, began classifying these investments under the caption "short-term
investments" in its Consolidated Balance Sheets and Consolidated Statements of
Cash Flows in the third quarter of 2001. Prior to the third quarter of 2001, the
Company classified these short-term, highly liquid debt instruments under the
caption "cash equivalents" in its Consolidated Balance Sheets and Consolidated
Statements of Cash Flows. Financial statements for the periods prior to the
third quarter of 2001 have been restated to conform to the third quarter 2001
presentation.

Recently Adopted Accounting Standards. In June 2001, the Financial Accounting
Standards Board issued Statement of Financial Accounting Standards ("SFAS") SFAS
No. 142, "Goodwill and Other Intangible Assets." SFAS No. 142 is required to be
adopted for fiscal years beginning after December 15, 2001. Under SFAS No. 142,
goodwill and intangible assets deemed to have indefinite lives will no longer be
amortized over a pre-determined period, but are required to be periodically
reviewed for impairment. Other intangible assets with finite lives will continue
to be amortized over their useful lives. An impairment loss resulting from the
adoption of SFAS No. 142 would be accounted for as a cumulative effect of a
change in accounting principle and recognized in the entity's first interim
period financial statements regardless of the interim period in which the
measurement is completed. Any subsequent impairment losses would be reflected
within operating results in the income statement. The Company has not yet
determined what the effect of SFAS No. 142 will be on the earnings and financial
position of the Company.


NOTE B - INVESTMENTS

At September 30, 2001, the Company had fixed maturity securities available for
sale with a carrying value and a fair value of $2,117.1 million and an amortized
cost of $2,153.4 million. At December 31, 2000, the Company had fixed maturity
securities available for sale with a carrying value and a fair value of $2,010.6
million and an amortized cost of $2,103.2 million.



                                      -7-
<PAGE>

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

NOTE C - SEGMENT INFORMATION

<TABLE>
<CAPTION>
                                                              Three Months Ended              Nine Months Ended
                                                                 September 30,                  September 30,
                                                            ------------------------      ------------------------
                                                              2001            2000          2001           2000
                                                            ---------      ---------      ---------      ---------
                                                                            (dollars in thousands)
<S>                                                         <C>            <C>            <C>            <C>
Revenues excluding net realized investment losses:
    Group employee benefit products ...................     $ 142,718      $ 140,238      $ 420,208      $ 409,528
    Asset accumulation products .......................        17,604         21,192         54,129         63,076
    Other (1) .........................................         5,143          5,218         15,445         16,138
                                                            ---------      ---------      ---------      ---------
                                                            $ 165,465      $ 166,648      $ 489,782      $ 488,742
                                                            =========      =========      =========      =========

Operating income (2):
    Group employee benefit products ...................     $  25,659      $  34,435      $  84,137      $ 101,868
    Asset accumulation products .......................         2,776          7,129          9,497         22,453
    Other (1) .........................................        (1,245)          (815)        (3,743)        (2,760)
                                                            ---------      ---------      ---------      ---------
                                                            $  27,190      $  40,749      $  89,891      $ 121,561
                                                            =========      =========      =========      =========
</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 losses and before interest and
     income tax expense and extraordinary gain.



NOTE D - REPURCHASE OF SENIOR NOTES AND CAPITAL SECURITIES OF DELPHI FUNDING
L.L.C.

In June 2001, the Company repurchased $8.0 million par value of the 8.0% Senior
Notes due in October 2003. The Company also repurchased $64.0 million
liquidation amount of the 9.31% Capital Securities, Series A, due in March 2027,
during the first nine months of 2001. The Company recognized an extraordinary
gain of $7.4 million, net of income tax expense of $4.0 million, in connection
with these repurchases.


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           Nine Months Ended
                                                               September 30,               September 30,
                                                          ----------------------      ----------------------
                                                            2001          2000          2001          2000
                                                          --------      --------      --------      --------
                                                             (dollars in thousands, except per share data)
<S>                                                       <C>           <C>           <C>           <C>
Numerator:
   Income before extraordinary gain ................      $ 11,572      $ 21,302      $ 47,672      $ 65,504
   Extraordinary gain, net of income taxes .........         1,233             -         7,446             -
                                                          --------      --------      --------      --------
        Net income .................................      $ 12,805      $ 21,302      $ 55,118      $ 65,504
                                                          ========      ========      ========      ========

Denominator:
   Weighted average common shares outstanding ......        20,564        20,358        20,542        20,356
      Effect of dilutive securities ................           585           796           564           683
                                                          --------      --------      --------      --------
   Weighted average common shares outstanding,
      assuming dilution ............................        21,149        21,154        21,106        21,039
                                                          ========      ========      ========      ========
</TABLE>



                                      -8-
<PAGE>

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


NOTE E - COMPUTATION OF RESULTS PER SHARE - (CONTINUED)

<TABLE>
<CAPTION>
                                                         Three Months Ended         Nine Months Ended
                                                           September 30,              September 30,
                                                        --------------------      --------------------
                                                          2001         2000         2001         2000
                                                        -------      -------      -------      -------
                                                         (dollars in thousands, except per share data)
<S>                                                     <C>          <C>          <C>          <C>
Basic results per share of common stock:
  Income before extraordinary gain ...............      $  0.56      $  1.05      $  2.32      $  3.22
  Extraordinary gain, net of income taxes ........         0.06            -         0.36            -
                                                        -------      -------      -------      -------
           Net income ............................      $  0.62      $  1.05      $  2.68      $  3.22
                                                        =======      =======      =======      =======

Diluted results per share of common stock:
  Income before extraordinary gain ...............      $  0.55      $  1.01      $  2.26      $  3.11
  Extraordinary gain, net of income taxes ........         0.06            -         0.35            -
                                                        -------      -------      -------      -------
           Net income ............................      $  0.61      $  1.01      $  2.61      $  3.11
                                                        =======      =======      =======      =======
</TABLE>



                                      -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 report on Form 10-K for the year ended December 31, 2000. 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, 2000.

RESULTS OF OPERATIONS

Nine Months Ended September 30, 2001 Compared to
Nine Months Ended September 30, 2000

Premium and Fee Income. Premium and fee income was $372.9 million for the nine
months of 2001 as compared to $345.8 million in the 2000 period, an increase of
8%. Premiums from core group employee benefit products increased 13% to $333.3
million in the first nine months of 2001 from $294.4 million in the comparable
period of 2000. This increase reflects normal growth in employment and salary
levels for the Company's existing customer base, price increases, production of
new business and improved persistency. Core group employee benefit products
include group life, disability, excess and large deductible workers'
compensation, travel accident and dental insurance and self-insurance workers'
compensation bonds. Excess workers' compensation premiums increased 30% to $53.3
million in the first nine months of 2001 from $40.9 million in the comparable
period of 2000. This increase reflects improvements in the pricing environment
in this market sector and increased demand due to higher primary workers'
compensation rates. Disruption in the excess workers' compensation marketplace
due to difficulties experienced by some competitors created opportunities for
SNCC, which contributed to high levels of new production, particularly during
2000. The Company believes that additional increases in primary workers'
compensation rates and rising reinsurance costs as a result of the World Trade
Center attacks will further increase the demand for its excess workers'
compensation products and result in price increases for these products. The
Company has also implemented price increases for certain disability customers.
Non-core group employee benefit products include reinsurance pools, loss
portfolio transfers ("LPTs"), primary workers' compensation, commercial
automobile liability and bail bond insurance, and property and workers'
compensation reinsurance. Premiums from non-core group employee benefit products
decreased to $26.3 million in the first nine months of 2001 from $37.6 million
in the comparable period of 2000 primarily due to a lower level of premium from
LPTs, which are episodic in nature. Deposits from the Company's asset
accumulation products were $64.8 million for the first nine months of 2001 as
compared to $119.6 million for the first nine months of 2000. 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 made a decision in the
first quarter of 2001 to reduce the crediting rates offered on its asset
accumulation products due to the decline in market interest rates and the
resulting interest rate spreads available to the Company on these products.
Accordingly, the Company experienced a lower level of production from its asset
accumulation business in the first nine months of 2001 as compared to the same
period in 2000.

Net Investment Income. Net investment income for the first nine months of 2001
was $116.9 million as compared to $142.9 million for the 2000 period. The tax
equivalent weighted average annualized yield (1) on invested assets was 6.9% on
average invested assets(2) of $2,325.7 million for the first nine months of 2001
and 7.7% on average invested assets(2) of $2,561.6 million for the first nine
months of 2000. The decrease in investment income reflects the Company's
liquidation during the fourth quarter of 2000 of a substantial majority of its
holding company investments. The proceeds from these sales were used to repay
$150.0 million of outstanding borrowings under the Company's Credit Agreements
in the first half of 2001 and to repurchase $64.0 million liquidation amount of
the Capital Securities during the first nine months of 2001.

Net realized investment losses. Net realized investment losses were $6.3 million
in the first nine months of 2001 as compared to $3.6 million in the first nine
months of 2000. The Company's investment strategy results in periodic sales of
securities and the recognition of realized investment gains and losses. In the
third quarter of 2001, the net loss realized on the Company's investment
portfolio includes a $12.5 million provision for the other than temporary
decline in the fair value of certain fixed maturity securities.

(1)  The tax equivalent weighted average annualized yield on the Company's
     investment portfolio for each period is computed by dividing net investment
     income, increased by the tax savings generated from tax exempt interest
     income and the dividends received deduction, by average invested assets for
     the period.

(2)  Average invested assets are computed by dividing the total of invested
     assets as reported on the Company's balance sheet at the beginning of each
     period plus the individual quarter-end balances by the total number of
     periods and deducting one-half of net investment income, including tax
     savings.



                                      -10-
<PAGE>

Benefits and Expenses. Policyholder benefits and expenses for the first nine
months of 2001 were $399.9 million as compared to $367.2 million for the 2000
period, an increase of 9%. This increase primarily reflects the increase in
premiums from the Company's core group employee benefit products discussed
above. Policyholder benefits for the first nine months of 2001 also include
losses of $3.8 million, net of reinsurance coverages, as a result of the World
Trade Center attacks. The combined ratio (loss ratio plus expense ratio) for the
Company's group employee benefits segment was 92.4% in the first nine months of
2001, excluding the World Trade Center losses, and 92.7% for the comparable
period of 2000. However, the Company anticipates that this combined ratio will
increase in the fourth quarter of 2001 due to a strengthening in its excess
workers' compensation reserves. A number of unusual catastrophic losses,
unrelated to the World Trade Center attacks, have recently occurred which
present the likelihood of higher than previously established reserves for
expected claim payments. While presently available information is not sufficient
to quantify the level of any reserve strengthening, a review has been undertaken
which will be completed by the end of the fourth quarter of 2001. Any resulting
reserve strengthening will be reflected in the Company's earnings at that time.
In addition, certain non-core group employee benefit products expose the Company
to the possibility of episodic losses, which could cause the combined ratio to
differ materially from current trends. Benefits and interest credited on asset
accumulation products increased by $3.2 million in the first nine months of 2001
principally due to an increase in average funds under management from $659.9
million in the first nine months of 2000 to $743.8 million in the 2001 period.
The weighted average annualized crediting rate on asset accumulation products
was 5.5% in the first nine months of 2000 and 2001.

Interest Expense and Extraordinary Gain. Interest expense was $13.8 million in
the first nine months of 2001 as compared to $23.1 million in the 2000 period, a
decrease of $9.3 million. This decrease was primarily a result of the Company's
repayment of $150.0 million of outstanding borrowings under the Company's Credit
Agreements during the first half of 2001 and the 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
repurchased $8.0 million par value of the 8.0% Senior Notes in June 2001. The
Company recognized an extraordinary gain of $7.4 million, net of income tax
expense of $4.0 million, in connection with these repurchases.

Income before extraordinary gain. Management believes the concept of
"operating earnings" of companies is helpful in comparing the Company's
performance with that of similar companies. However, operating earnings
should not be considered a substitute for net income as an indication of the
Company's overall performance. Operating earnings for the Company,
consisting of income before extraordinary gain adjusted to exclude realized
investment losses, were $51.7 million ($2.45 per share, diluted) for the first
nine months of 2001 as compared to $67.9 million ($3.23 per share, diluted) for
the same period in 2000. The decrease in operating earnings is primarily
attributable to the Company's liquidation during the fourth quarter of 2000 of a
substantial majority of its holding company investments (see "Net Investment
Income"). Operating earnings for the first nine months of 2001 have also
been reduced by losses of $2.5 million ($0.12 per share, diluted), net of a tax
benefit of $1.3 million, as a result of the World Trade Center attacks.

Three Months Ended September 30, 2001 Compared to
Three Months Ended September 30, 2000

Premium and Fee Income. Premium and fee income for the third quarter of 2001 was
$127.1 million as compared to $121.0 million for the 2000 period, an increase of
5%. Premiums from core group employee benefit products increased 13% to $114.2
million in the third quarter of 2001 from $101.2 million in the comparable
period of 2000. This increase reflects normal growth in employment and salary
levels for the Company's existing customer base, price increases, production of
new business and improved persistency. Core group employee benefit products
include group life, disability, excess and large deductible workers'
compensation, travel accident and dental insurance and self-insurance workers'
compensation bonds. Excess workers' compensation premiums increased 28% to $18.9
million from $14.8 million in the comparable period of 2000. This increase
reflects improvements in the pricing environment in this market sector and
increased demand due to higher primary workers' compensation rates. Disruption
in the excess workers' compensation marketplace due to difficulties experienced
by some competitors created opportunities for SNCC, which contributed to high
levels of new production, particularly during 2000. The Company believes that
additional increases in primary workers' compensation rates and rising
reinsurance costs as a result of the World Trade Center attacks will further
increase the demand for its excess workers' compensation products and result in
price increases for these products. The Company has also implemented price
increases for certain disability customers. Non-core group employee benefit
products include reinsurance pools, loss portfolio transfers ("LPTs"), primary
workers' compensation, commercial automobile liability and bail bond insurance,
and property and workers' compensation reinsurance. Premiums from non-core group
employee benefit products decreased to $8.2 million in the third quarter of 2001
from $15.2 million in the comparable period of 2000 primarily due to a lower
level of premium from LPTs, which are episodic in nature. Deposits from the
Company's asset accumulation products were $22.7 million for the third quarter
of 2001 as compared to $40.9 million for the third quarter of 2000. Deposits for
these products, which are long-term in nature, are not recorded as premiums;
instead,



                                      -11-
<PAGE>

the deposits are recorded as a liability. The Company made a decision in the
first quarter of 2001 to reduce the crediting rates offered on its asset
accumulation products due to the decline in market interest rates and the
resulting interest rate spreads available to the Company on these products.
Accordingly, the Company experienced a lower level of production from its asset
accumulation business in the third quarter of 2001 as compared to the same
period in 2000.

Net Investment Income. Net investment income for the third quarter of 2001 was
$38.4 million as compared to $45.7 million in the third quarter of 2000. The tax
equivalent weighted average annualized yield(1) on invested assets was 6.8% on
average invested assets(2) of $2,326.6 million for the third quarter of 2001 and
7.2% on average invested assets(2) of $2,619.2 million for the third quarter of
2000. The decrease in investment income reflects the Company's liquidation
during the fourth quarter of 2000 of a substantial majority of its holding
company investments. The proceeds from these sales were used to repay $150.0
million of outstanding borrowings under the Company's Credit Agreements and to
repurchase $64.0 million liquidation amount of the Capital Securities during the
first nine months of 2001.

Net realized investment losses. Net realized investment losses were $6.9 million
in the third quarter of 2001 as compared to $2.1 million in the comparable
period of 2000. The Company's investment strategy results in periodic sales of
securities and the recognition of realized investment gains and losses. In the
third quarter of 2001, the net loss realized on the Company's investment
portfolio includes a $12.5 million provision for the other than temporary
decline in the fair value of certain fixed maturity securities.

Benefits and Expenses. Policyholder benefits and expenses for the third quarter
of 2001 were $138.3 million as compared to $125.9 million for the third quarter
of 2000, an increase of 10%. This increase primarily reflects the increase in
premiums from the Company's core group employee benefit products discussed
above. Policyholder benefits for the third quarter of 2001 also include losses
of $3.8 million, net of reinsurance coverages, as a result of the World Trade
Center attacks. The combined ratio (loss ratio plus expense ratio) for the
Company's group employee benefits segment was 92.5% in the third quarter of
2001, excluding the World Trade Center losses, as compared to 90.9% for the 2000
period. However, the Company anticipates that this combined ratio will increase
in the fourth quarter of 2001 due to a strengthening in its excess workers'
compensation reserves. A number of unusual catastrophic losses, unrelated to the
World Trade Center attacks, have recently occurred which present the likelihood
of higher than previously established reserves for expected claims payments.
While presently available information is not sufficient to quantify the level of
any reserve strengthening, a review has been undertaken which will be completed
by the end of the fourth quarter of 2001. Any resulting reserve strengthening
will be reflected in the Company's earnings at that time. In addition, certain
non-core group employee benefit products expose the Company to the possibility
of episodic losses, which could cause the combined ratio to differ materially
from current trends. Benefits and interest credited on asset accumulation
products increased by $0.5 million in the third quarter of 2001 principally due
to an increase in average funds under management from $682.9 million in the
third quarter of 2000 to $748.2 million in the 2001 period. The weighted average
annualized crediting rate on asset accumulation products in the third quarter of
2001 and the comparable period of 2000 was 5.6%.

Interest Expense and Extraordinary Gain. Interest expense was $3.6 million for
the third quarter of 2001 as compared to $7.7 million in the third quarter of
2000, a decrease of $4.1 million. This decrease was primarily a result of the
Company's repayment of $150.0 million of outstanding borrowings under the
Company's Credit Agreements and $54.0 million liquidation amount of the Capital
Securities during the first half of 2001. The Company repurchased an additional
$10.0 million liquidation amount of the Capital Securities in the open market at
the end of the third quarter of 2001. The Company recognized an extraordinary
gain of $1.2 million, net of income tax expense of $0.7 million, in connection
with this repurchase.

Income before extraordinary gain. Management believes the concept of
"operating earnings" of companies is helpful in comparing the Company's
performance with that of similar companies. However, operating earnings
should not be considered a substitute for net income as an indication of the
Company's overall performance. Operating earnings for the Company,
consisting of income before extraordinary gain adjusted to exclude realized
investment losses, were $16.1 million ($0.76 per share, diluted) for the third
quarter of 2001 as compared to $22.6 million ($1.07 per share, diluted) for the
same period in 2000. The decrease in operating earnings is primarily
attributable to the Company's liquidation during the fourth quarter of 2000 of a
substantial majority of its holding company investments (see "Net Investment
Income"). Operating earnings for the third quarter of 2001 have also been
reduced by losses of $2.5 million ($0.12 per share, diluted), net of a tax
benefit of $1.3 million, as a result of the World Trade Center attacks.

(1)  The tax equivalent weighted average annualized yield on the Company's
     investment portfolio for each period is computed by dividing net investment
     income, increased by the tax savings generated from tax exempt interest
     income and the dividends received deduction, by average invested assets for
     the period.

(2)  Average invested assets are computed by dividing the total of invested
     assets as reported on the Company's balance sheet at the beginning of each
     period plus the individual quarter-end balances by the total number of
     periods and deducting one-half of net investment income, including tax
     savings.



                                      -12-
<PAGE>

LIQUIDITY AND CAPITAL RESOURCES

General. The Company had $74.9 million of financial resources available at the
holding company level at September 30, 2001, which was primarily comprised of
fixed maturity securities and investments in the common stock of its investment
subsidiaries. The assets of the investment subsidiaries are primarily invested
in fixed maturity securities. Financial resources available at the holding
company level have decreased $192.0 million since December 31, 2000 primarily
due to the liquidation of a substantial majority of the investments of its
investment subsidiaries. The Company used the proceeds from these sales to repay
$150.0 million of outstanding borrowings under the Credit Agreements in the
first half of 2001 and to repurchase $64.0 million liquidation amount of the
Capital Securities during the first nine months of 2001. In addition, the
Company repurchased $8.0 million par value of the 8% Senior Notes in June 2001.
The maximum amount of borrowings available under the Credit Agreements, which
mature in April 2003, is currently $190.0 million and is scheduled to reduce to
$140.0 million in October 2002. The Company has $177.0 million of borrowings
available to it as of October 1, 2001. A shelf registration is also in effect
under which up to $49.2 million in securities may be issued by the Company.

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 $77.8 million during
2001, of which $26.0 million has been paid during the first nine months of 2001.
In general, dividends from the Company's non-insurance subsidiaries are not
subject to regulatory or other restrictions.

The Company's current liquidity needs, in addition to funding operating
expenses, include principal and interest payments on the Senior Notes, the SIG
Senior Notes and the Subordinated Notes and distributions on the Capital
Securities. 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. The SIG Senior Notes mature in $9.0 million annual installments, with
the next installment payable in May 2002 and 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.

Operating activities, which include $29.8 million of cash provided by trading
account activity, increased cash by $124.1 million in the first nine months of
2001. Operating activities during the first nine months of 2000 increased cash
by $70.7 million, excluding $58.1 million of funds related to a rescinded
reinsurance transaction that were returned to the ceding company during the
first quarter of 2000 and a net cash payment of $19.7 million related to the
cession by the Company of group employee benefit product reserves. During the
first nine months of 2001, proceeds from investment sales were primarily used to
repay $150.0 million of outstanding borrowings under the Company's Credit
Agreements in the first half of 2001 and repurchase $64.0 million liquidation
amount of the Capital Securities in the first nine months of 2001. Sources of
liquidity available to the Company and its subsidiaries are expected to exceed
their current and long-term cash requirements.

In September 2001, the Company entered into an agreement with Delphi
International Ltd. and Oracle Re to commute various reinsurance agreements that
the Company had entered into with Oracle Re in 1998. Upon consummation of the
commutation in October 2001, Oracle Re paid approximately $84.0 million to the
Company, net of $11.5 million which had been held by the Company, related to
group employee benefit reserves ceded to Oracle Re under such agreements. The
Company expects that its net investment income and benefit expense (and,
therefore, its combined ratio) will increase as a result of the commutation.
However, this transaction is not expected to have a material impact on the
Company's financial position, liquidity or net income.

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, 2000.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

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 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



                                      -13-
<PAGE>

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, and market pricing and competitive trends relating to insurance
products and services, and those relating specifically to the Company's
business, such as the level of its insurance premiums and fee income, the claims
experience 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. The Company disclaims any
obligation to update forward-looking information.


                           PART II. OTHER INFORMATION

Item 6. Exhibits and Reports on Form 8-K

    (a) Exhibits

        10.1 - Commutation, Prepayment and Redemption Agreement, dated September
               14, 2001, between Delphi Financial Group, Inc., Safety National
               Casualty Corporation, Reliance Standard Life Insurance Company,
               Delphi International Ltd. and Oracle Reinsurance Company Ltd.

        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


                                   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: November 14, 2001



                                      -14-