UNITED STATES
                      SECURITIES AND EXCHANGE COMMISSION
                           WASHINGTON, D. C.  20549
                                   FORM 10-Q

(Mark One)
[X]   QUARTERLY  REPORT UNDER SECTION 13  OR 15(D) OF  THE SECURITIES EXCHANGE
      ACT OF 1934


                   FOR THE QUARTER ENDED SEPTEMBER 30, 1996


[ ]   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  0-8162

                        ACCEL INTERNATIONAL CORPORATION
            (Exact name of registrant as specified in its charter)

            DELAWARE                                        31-0788334
(State or other jurisdiction of                         (I.R.S. Employer
 incorporation or organization)                         Identification No.)


  475 METRO PLACE NORTH, SUITE 100, DUBLIN, OHIO    43017
(Address of principal executive offices)           (Zip Code)

                                 614-764-7000
                        (Registrant's Telephone Number)


SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:  None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

                              Title of each class
                         COMMON STOCK, $.10 PAR VALUE

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulations S-K is not contained herein,  and will not be contained, to the
best of registrant's knowledge, in  definitive proxy or information statements
incorporated by reference in  Part III of this  Form 10-Q or any amendment  to
this Form 10-Q.   _____

Indicate  by  check mark  whether  the registrant  (1) has  filed  all reports
required to be  filed by Section 13 or 15(d) of the Securities Exchange Act of
1934  during the  preceding 12  months (or  for such  shorter period  that the
registrant was required  to file such  reports), and (2)  has been subject  to
such filing requirements for the past 90 days.  Yes   X     No       
                                                    -----       -----


As of October 31, 1996, there were  8,603,742 shares of Common Stock, $.10 par
value per Share outstanding.



                                                    COMMISSION FILE NO. 0-8162


               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                              SEPTEMBER 30, 1996

                                     INDEX



PART I      FINANCIAL INFORMATION

Item 1.     Financial Statements                                         Page 
                                                                         ---- 

            Unaudited Consolidated Balance Sheets
              (September 30, 1996 and December 31, 1995)                1 -  2

            Unaudited Consolidated Statements of Operations (Nine months
              and three months ended September 30, 1996 and 1995)            3

            Unaudited Consolidated Statements of Common Stockholders'
              Equity (Nine months ended September 30, 1996 and year
              ended December 31, 1995)                                       4

            Unaudited Consolidated Statements of Cash Flows (Nine months
              ended September 30, 1996 and 1995)                             5

            Notes to Unaudited Consolidated Financial Statements        6 - 11

Item 2.     Management's Discussion and Analysis of Financial
              Condition and Results of Operations                      12 - 16


PART II     OTHER INFORMATION

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

ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                     UNAUDITED CONSOLIDATED BALANCE SHEETS


                                                    September 30, December 31,
                                                          1996         1995  
                                                       (Thousands of dollars)
ASSETS

Investments:
  Investments available for sale, at fair value:
    Fixed maturities (cost: 1996--$ 57,251,000;
      1995--$53,427,000)                               $  55,927    $  53,204
    Equity securities (cost: 1996--$6,275,000;
      1995--$5,433,000)                                    6,266        5,451
  Short-term investments, at cost                         11,960        4,278
  Other invested assets, at fair value 
    (cost: 1996--$353,000;1995--$364,000)                    321          364
                                                       ---------    ---------
                                                          74,474       63,297

Cash                                                           -        5,039

Receivables:
  Premiums in process of transmittal, less
    allowance (1996--$282,000; 1995--$279,000)            10,443        1,779
  Amounts due from reinsurers                             31,481        9,119
  Federal income taxes recoverable                           481           70
                                                       ---------    ---------


                                                          42,405       10,968

Accrued investment income                                    579          557

Prepaid reinsurance premiums                              17,052       14,895

Reinsurance premium deposits                              25,182       51,634

Deferred policy acquisition costs                         32,632       31,839

Equipment--at cost, less accumulated
  depreciation (1996--$169,000;
  1995--$564,000)                                             46          187

Leasehold improvements                                       161            -

Property occupied by the Company--at cost, less
  accumulated depreciation - (1995--$2,382,000)                -        3,167

Other assets:
  Cost in excess of fair value of net
    assets of subsidiaries at dates of
    acquisition ($4,448,000) less
    accumulated amortization                                 742          822
  Funds held under reinsurance agreements                 20,313          829
  Other                                                      950          273
                                                       ---------    ---------
                                                          22,005        1,924
                                                       ---------    ---------
                                                       $ 214,536    $ 183,507
                                                       =========    =========


                                                                   (Continued)

               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

              UNAUDITED CONSOLIDATED BALANCE SHEETS--(CONTINUED)


                                                    September 30, December 31,
                                                          1996         1995  
                                                       (Thousands of dollars)
LIABILITIES AND COMMON STOCKHOLDERS' EQUITY

Policy Reserves and Liabilities:
  Unearned premium reserves                          $  87,445      $ 82,080
  Insurance claims                                      23,813        22,761
  Other                                                     13            11
                                                     ---------      --------
                                                       111,271       104,852

Other Liabilities:
  Funds held under reinsurance agreements               19,490         3,072
  Cash overdraft                                           610             -
  Accounts payable and other liabilities                 2,511         2,353
  Commissions payable                                    5,706         5,010
  Amounts due reinsurers                                 5,716         4,442
  Federal income taxes:
    Current                                              1,006             -
    Deferred                                             4,234         5,024
  Deferred reinsurance commissions                      18,505        15,663
  Notes payable--Note D                                 16,500        22,531
                                                     ---------      --------
                                                        74,278        58,095


Commitments and Contingencies

Redeemable Preferred Stock:
  Authorized shares--1,000,000;
    no issued or outstanding shares                          -             -

Common Stockholders' Equity: 
  Common Stock, $.10 par value
    Authorized shares (1996--15,000,000; 
      1995--10,000,000)
    Issued shares (1996--9,401,162;
      1995--5,243,852)                                     940           524
  Additional paid-in capital                            32,509        23,702
  Retained earnings                                      3,551         3,299
  Less 797,420 treasury shares at cost                  (6,599)       (6,599)
  ESOP loan                                                (49)         (161)
  Net unrealized depreciation on
    investment securities                               (1,365)         (205) 
                                                      ---------     ---------
         Total Common Stockholders' Equity              28,987        20,560
                                                      ---------     ---------
                                                     $ 214,536     $ 183,507
                                                      =========     =========





See notes to unaudited consolidated financial statements.

               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES 
                                                                              
               UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS 


                                    Three Months Ended     Nine Months Ended
                                       September 30,         September 30,
                                       1996       1995      1996         1995 

                                 (Thousands of dollars, except per share data)

REVENUE:
  Gross premiums written--Note E   $  15,288  $  15,297  $  49,152  $  43,669
  Less reinsurance ceded--Note E       3,969      3,413     11,395     10,454
                                   ---------  ---------  ---------  ---------
    Net premiums written              11,319     11,884     37,757     33,215
  Decrease (increase) in
    unearned premium reserves            945     (1,563)    (3,927)    (3,274)
                                   ---------  ---------  ---------  --------- 
    Premiums earned--Note E           12,264     10,321     33,830     29,941
  Net investment income:
    Interest and dividends             1,218      1,556      3,277      4,644
    Realized gains (losses)              (48)        24        227        303


  Service fees on extended
    service contracts                    662        594      1,885      1,645
  Other income                         1,439        253      1,711        375
                                    --------  ---------  ---------  ---------
                                      15,535     12,748     40,930     36,908

BENEFITS AND EXPENSES:
  Policy benefits--Note E              7,454      4,820     18,031     12,931
  Commissions and selling expenses     5,085      5,873     16,250     16,689
  Reinsurance expense recovery          (810)      (454)    (1,428)      (710)
  General and administrative           1,949      1,807      5,309      5,348
  Taxes, licenses and fees               689        437      1,560      1,398
  Interest                               489        414      1,577      1,288
  Decrease (increase) in deferred
    policy acquisition costs             305       (624)      (795)    (1,245)
                                   ---------  ---------    -------  --------- 
                                      15,161     12,273     40,504     35,699
                                   ---------  ---------  ---------  ---------

    INCOME BEFORE FEDERAL INCOME
      TAX AND EXTRAORDINARY ITEM         374        475        426      1,209

Federal income tax:
  Current                                582         84      1,095        341
  Deferred (benefit)                    (237)       226       (790)        36
                                   ---------  ---------  ---------  ---------
                                         345        310        305        377
                                   ---------  ---------  ---------  ---------

    INCOME BEFORE
      EXTRAORDINARY ITEM                  29        165        121        832

Extraordinary item--gain on
  extinguishment of debt--Note D         131          -        131          -
                                   ---------  ---------  ---------  ---------

    NET INCOME                     $     160  $     165  $     252  $     832
                                   =========  =========  =========  =========
Per Common Share:
  Income Before 
    Extraordinary item             $     .01  $     .04  $     .02  $     .19
  Extraordinary item                     .02          -        .03          -
                                   ---------  ---------  ---------  ---------
  Net Income                       $     .03  $     .04  $     .05  $     .19
                                   =========  =========  =========  =========
Weighted average number of common
  shares outstanding               6,029,561  4,446,432  4,998,048  4,446,432
                                   =========  =========  =========  =========


See notes to unaudited consolidated financial statements.

<TABLE>
                             ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                                 UNAUDITED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY 


                                                                                                      Net
                                                                                                   unrealized


                                                                                                   appreciation
                                                                             Common                (depreci-    Foreign
                                                    Additional                stock                ation) on   currency
                                           Common      paid-in    Retained   held in        ESOP   investment translation
                                           stock       capital    earnings   treasury       loan   securities adjustments   Total 
                                                                  (Thousands of dollars) 
<S>                                        <C>         <C>        <C>        <C>         <C>        <C>        <C>         <C>
Balances at December 31, 1994              $   524     $24,066    $ 4,759    $(6,599)    $  (627)   $(6,672)   $   (85)    $15,366
   Payments on and write down
      of ESOP loan                               -        (364)         -          -         466          -          -         102
   Change in net unrealized
      depreciation on
      investment securities                      -           -          -          -           -      6,467          -       6,467
   Change in foreign currency
      translation adjustment                     -           -          -          -           -          -         85          85
   Net loss                                      -           -     (1,460)         -           -          -          -      (1,460)
                                            -------    -------    -------    -------     -------    -------    -------     -------
Balances at December 31, 1995                  524      23,702      3,299     (6,599)       (161)      (205)                20,560
   Payments on ESOP loan                         -           -          -          -         112          -          -         112
   Issuance of 110,000 shares of
      Common Stock under Common
      Stock Option Plan                         11         223          -          -           -          -          -         234
   Issuance of 4,047,310 shares
      of Common Stock in 
      conjuction with the Rights
      Offering and the 
      Supplemental Offering                    405       8,584          -          -           -          -          -       8,989
   Change in net unrealized
      depreciation on
      investment securities                      -           -          -          -           -     (1,160)         -      (1,160)
   Net income                                    -           -        252          -           -          -          -         252
                                            -------    -------    -------    -------     -------    -------    -------     -------
Balances at September 30, 1996             $   940     $32,509    $ 3,551    $(6,599)    $   (49)   $(1,365)   $     -     $28,987
                                            =======    =======    =======    =======     =======    =======    =======     =======


See notes to unaudited consolidated financial statements.
</TABLE>


               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES 

               UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS 


                                                          Nine Months Ended
                                                            September 30,
                                                          1996         1995  
                                                       (Thousands of dollars)

OPERATING ACTIVITIES: 
  Net income before extraordinary item                  $    121    $     832
  Adjustments to reconcile net income 
    to net cash used in operating activities: 
      Change in premiums receivable                       (8,667)         522
      Change in accrued investment income                    (22)         116
      Change in prepaid reinsurance premiums              (2,157)       2,440
      Change in unearned premium reserves                  5,365          519
      Change in claim reserves                             1,052       (1,880)
      Change in amounts due reinsurers
         and amounts due from reinsurers                 (21,088)      (3,368)
      Change in funds held under reinsurance
         agreements                                       (3,066)        (381)
      Change in other assets, other liabilities,
         and accrued income taxes                            206          581
      Interest paid in kind                                  403          422
      Accrual of discount on bonds                          (179)         (85)
      Amortization of premium on bonds                        77           61
      Amortization of deferred policy acquisition 
         costs                                            15,537       15,286
      Policy acquisition costs deferred                  (16,330)     (16,567)
      Reinsurance commissions earned                     (16,846)     (10,189)
      Reinsurance commissions received                    19,688        8,940
      Provision for depreciation and amortization            225          312
      Net realized gains on investments                     (227)        (303)
                                                        --------     -------- 
NET CASH USED IN OPERATING ACTIVITIES
  EXCLUDING EXTRAORDINARY ITEM                           (25,908)      (2,742)
      Extraordinary Item                                     131            -
                                                        --------     --------
NET CASH USED IN OPERATING ACTIVITIES                    (25,777)      (2,742)
INVESTING ACTIVITIES:
    Sale of investments                                    9,566       25,137
    Purchase of investments                              (21,739)     (23,079)
    Sale of property occupied by the Company               3,298            -
    Other, net                                              (350)         (43)
                                                        --------     -------- 
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES       (9,225)       2,015
FINANCING ACTIVITIES:
  Payment on ESOP loan                                       112           76
  Repayment of notes payable                                (731)        (200)
  Issuance of Common Stock under
    Stock Option Plan                                        257            -
  Issuance of Common Stock under
    Rights Offering                                        3,263            -
  Change in reinsurance premium deposit                   26,452          301
                                                        --------     --------
NET CASH PROVIDED BY FINANCING ACTIVITIES                 29,353          177
                                                        --------     --------
  NET DECREASE IN CASH                                    (5,649)        (550)
Cash at beginning of period                                5,039        1,044
                                                        --------     --------
CASH (OVERDRAFT) AT END OF PERIOD                       $   (610)    $    494
                                                        ========     ========


SUPPLEMENTAL SCHEDULE OF NON-CASH FINANCING 
  ACTIVITIES:  CANCELLATION OF SUBORDINATED
  NOTES AS CONSIDERATION FOR THE PURCHASE OF
  COMMON STOCK--NOTE D                                     5,703            -
                                                        ========     ========




See notes to unaudited consolidated financial statements.

               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                              SEPTEMBER 30, 1996


NOTE A--SIGNIFICANT ACCOUNTING POLICIES

Basis  of Presentation:    The accompanying  unaudited consolidated  financial
statements  of  ACCEL  International  Corporation  ("ACCEL")  and subsidiaries
(collectively  referred  to herein  as the  "Company")  have been  prepared in
accordance with generally accepted accounting principles for interim financial
information  and  with the  instructions  to  Form  10-Q  and  Article  10  of
Regulation S-X which, as to the insurance company subsidiaries, differ in some
respects from statutory accounting practices  prescribed or permitted by state
insurance   departments.    Accordingly,  they  do  not  include  all  of  the
information and footnotes required by generally accepted accounting principles
for  complete financial  statements.    In  the  opinion  of  management,  all
adjustments  considered necessary for a  fair presentation have been included.
Operating  results for all periods presented are not necessarily indicative of
the results that may  be expected for the full year.  For further information,
refer to the consolidated financial statements and footnotes thereto  included
in  the Company's Annual Report  on Form 10-K for the  year ended December 31,
1995.

PRINCIPLES  OF  CONSOLIDATION:     The  accompanying   unaudited  consolidated
financial  statements  include the  accounts  of  ACCEL  and its  wholly-owned
subsidiaries.   All significant  intercompany accounts  and  transactions have
been eliminated in the unaudited consolidated financial statements.

DESCRIPTION OF BUSINESS:   ACCEL is an insurance holding  company incorporated
in Delaware  in June 1978  as the successor  to an Ohio  corporation, formerly
Acceleration Corporation, organized in 1969.  The Company has been  engaged in
the  sale and  underwriting  of credit  life  and credit  accident  and health
insurance,  extended service  contracts,  vendor's single  interest and  other
specialty casualty  products.   Beginning in  the first  quarter of  1996, the
Company began to  offer coverages  for long  haul trucking  and charter  buses
through a managing general agent.  In the second quarter the  Company began to
offer commercial multi-peril  policies to auto dealers.   In the third quarter
the Company elected to exit the commercial multi-peril line due to differences
with the managing general  agent who produced and administered  this business.
The credit insurance  and extended  service contract products  continue to  be
offered  to  consumers,  principally  through  automobile  dealers,  financial
institutions  and  other  business  entities.    The  Company  is  subject  to
competition  from  other insurers  throughout the  states  in which  it writes
business.    The  Company  is  also subject  to  regulation  by  the Insurance
Departments  of states  in  which  it  is  licensed,  and  undergoes  periodic
examinations by those departments.

The following is  a description of the most significant  risks facing life and
health  and property/casualty  insurers and  how the  Company mitigates  those
risks:

  LEGAL/REGULATORY  RISK is the  risk that changes in  the legal or regulatory


  environment in which an insurer operates will create additional expenses not
  anticipated by  the insurer in  pricing its products.   That is,  regulatory
  initiatives  designed  to reduce  insurer  profits,  new  legal theories  or
  insurance company insolvencies through  guaranty fund assessments may create
  costs  for  the insurer  beyond those  currently  recorded in  the unaudited
  consolidated financial  statements.   The  Company  mitigates this  risk  by
  operating  throughout the United States,  thus reducing its  exposure to any
  single jurisdiction, and also  by employing underwriting and loss  adjusting
  practices which identify and minimize the adverse impact of this risk.

  CREDIT RISK is the risk that issuers of securities owned by the Company will
  default or that other  parties, including reinsurers, which owe  the Company
  money, will not  pay.   The Company  minimizes this  risk by  adhering to  a
  conservative  investment  strategy,  by maintaining  sound  reinsurance  and
  credit  and  collection policies  and by  providing  for any  amounts deemed
  uncollectible.

  INTEREST RATE RISK is  the risk that interest rates will  change and cause a
  decrease in  the value of an  insurer's investments.   The Company mitigates
  this risk  by attempting to match  the maturity schedule of  its assets with
  the expected  payouts of its  liabilities.   To the extent  that liabilities
  come  due more  quickly than assets  mature, an  insurer may  have to borrow
  funds or sell  assets prior to maturity and potentially  recognize a gain or
  loss.

               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


NOTE A--SIGNIFICANT ACCOUNTING POLICIES--(CONTINUED)

ACCOUNTING  ESTIMATES:   In  preparing  the  unaudited consolidated  financial
statements, management  is required  to  make estimates  and assumptions  that
affect the reported amounts  of assets and liabilities and  the disclosures of
contingent assets and liabilities as of the date of the unaudited consolidated
financial  statements  and revenues  and  expenses for  the  reporting period.
Actual results could differ significantly from those estimates.

The  most significant  estimates include  those used  in  determining deferred
policy acquisition costs and  the liability for unearned premium  reserves and
insurance claims.  Although  some variability is inherent in  these estimates,
management  believes the  amounts provided  are adequate.   The  estimates are
continually  reviewed  and  adjusted  as  necessary.    Such  adjustments  are
reflected in current operations.

INVESTMENTS:   The  Company classifies  all of  its fixed maturity  and equity
securities  as available for sale,  therefore these securities  are carried at
fair value and  the unrealized appreciation or  depreciation is reported as  a
separate  component of  common  stockholders' equity  after  giving effect  to
applicable income taxes.

Short-term  investments  which include  U.S.  Treasury  securities, commercial
paper and certificates of deposit are  carried at cost which approximates fair
value.

Other invested assets are carried at fair value.

Realized gains  and losses on  the disposal  of investments are  determined by
specific  identification  and  are  included  in  the  unaudited  consolidated
statements of operations.

When an  other than  temporary decline  in value is  recognized, the  specific
investment  is carried  at estimated  realizable value  and its  original book
value  is  reduced  to  reflect  such impairment  of  the  investment.    Such
reductions in book value are  reflected in realized investment losses for  the


period  in which they were written down.   For mortgage backed securities, the
Company's  accounting  follows  the  provisions of  the  Financial  Accounting
Standards  Board Emerging  Issues Tasks  Force  ("EITF") Consensus  No. 93-18.
This EITF requires that when the present value of estimated  future cash flows
discounted  at a risk-free rate  of return is less than  the cost basis of the
investment,  an impairment loss is to  be recognized by writing the investment
down to its fair value.

FEDERAL INCOME TAXES:   Deferred tax assets and liabilities are recognized for
future  tax consequences  attributable  to differences  between the  financial
statement carrying  amounts  of  existing  assets and  liabilities  and  their
respective tax  bases  and  operating  loss  and  tax  credit  carry-forwards.
Deferred  tax  assets and  liabilities are  measured  using enacted  tax rates
expected to  apply to  taxable income  in the years  in which  those temporary
differences are expected to be  recovered or settled.  Under this  method, the
effect on  deferred tax assets  and liabilities  of a change  in tax rates  is
recognized  in  income  in  the  period  that  includes  the  enactment  date.
Valuation allowances are established when necessary to reduce the deferred tax
assets to the amounts expected to be realized. 

EARNINGS PER COMMON SHARE:  Net income per common  share is computed using the
weighted average number of  common shares outstanding during the  period.  The
inclusion of common stock equivalents (options) would not be dilutive.

RECLASSIFICATIONS:    Certain  amounts  in  the  1995  unaudited  consolidated
financial  statements   have  been  reclassified  to  conform  with  the  1996
presentation.

NOTE B--FOREIGN CURRENCY TRANSLATION

The financial statements of Acceleration Insurance Company Limited ("AICL"), a
United  Kingdom subsidiary, have been  translated into U.S.  dollars using the
British  pound as the  functional currency.   The balance sheets  of AICL have
been translated into U.S. dollars using  exchange rates as of the date  of the
unaudited consolidated  financial statements.   The operating results  of AICL
have been  translated into  U.S. dollars using  the average exchange  rates in
effect during the respective periods.

               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


NOTE B--FOREIGN CURRENCY TRANSLATION--(CONTINUED)

Included in  foreign currency translation adjustments  are unrealized exchange
gains of $85,000 in 1995.

During  1995, the Company redeemed most of  its shares of AICL, which resulted
in  proceeds approximating  the Company's  original investment  in AICL.   The
transaction  was approved  by the  Department of  Trade and  Insurance (United
Kingdom).   On February 7, 1996,  the Company received the  final proceeds for
redemption of its remaining shares.

NOTE C--FEDERAL INCOME TAXES

The Company files a consolidated federal income tax return.  The provision for
income  taxes is  based  on income  for  financial reporting  purposes,  after
permanent differences.

NOTE D--NOTES PAYABLE

In July 1991, ACCEL issued $5,848,000 of subordinated notes (the "Subordinated
Notes") in connection with  the purchase of all  outstanding common shares  of
Randjill Group Ltd. ("RGL").  The Subordinated Notes had a nine-year term with
no principal payable until maturity,  and bore interest at 10.125% per  annum.


Effective June 30,  1992, ACCEL amended  the notes to  permit the issuance  of
additional notes  for  the  purpose  of making  interest  payments,  provided,
however, that ACCEL may at its option  pay cash in lieu of issuing  additional
notes in  any denomination of  less than  $1,000.  As  a result,  ACCEL issued
additional notes totaling $403,000  and $569,000 for the first nine  months of
1996 and the full year 1995, respectively.

Of the Subordinated Notes described above, $5,371,000 were initially issued to
Ranger  Insurance  Company  ("Ranger"),   a  company  related  through  common
ownership by a stockholder and director of  the Company.  In 1993, Ranger sold
all  of  the  Subordinated  Notes  held  by  it to  Chase  Insurance  Holdings
Corporation  ("CIHC"), another company  related through common  ownership by a
stockholder and director of the Company.  Additional Subordinated Notes in the
amount of $356,000  and $506,000 were issued  as interest payments  to related
parties  for   the  first  nine  months  of  1996  and  the  full  year  1995,
respectively.

On July 25, 1996, the Company commenced an offering of non-transferable rights
(the "Rights Offering")  to stockholders of  record as of  June 18, 1996  (see
Rights Offering under  Certain Events).   Under the  provisions of the  Rights
Offering, the Company permitted CIHC and its affiliate to tender the principal
amount  of their Subordinated Notes for cancellation as consideration (in lieu
of cash)  for the purchase  of shares of Common  Stock pursuant to  the Rights
Offering.  On  August 23,  1996, CIHC  and  its affiliate  tendered $5,619,046
principal amount of  their Subordinated  Notes plus an  additional $83,759  of
accrued  interest thereon  under the  terms of  the Rights  Offering.   At the
conclusion of the offering,  CIHC and its affiliate had reduced  their holding
of Subordinated Notes to $0.

In  a separate transaction, the  Company retired $731,533  principal amount of
Subordinated  Notes  held by  an unrelated  third  party for  consideration of
$600,000.  The Company recognized an extraordinary gain on this transaction of
$131,533.  No Federal  Income Tax was recognized  related to this gain due  to
the current consolidated tax position of the Company.

The   result  of  the  two  aforementioned  transactions  was  to  retire  all
outstanding Subordinated Notes. 

At  December  31,  1994,  the  Company  had  an  outstanding loan  balance  of
$13,000,000 under the  terms of  a credit agreement  (the "Credit  Agreement")
with a bank.  On  February 7, 1995 the  Company renegotiated the terms of  the
Credit Agreement.  Under the amended Credit Agreement, the quarterly principal
payments scheduled to begin in 1995  were waived.  Specific principal payments
totaling up to $1.5  million were due on June 30, 1995  and December 31, 1995,
respectively, from  the liquidation  of  AICL and  the projected  sale of  the
building used as  the corporate home office.   The loan  was to be payable  in
full on June 30, 1997.  



               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


NOTE D--NOTES PAYABLE--(CONTINUED)

On December  29, 1995,  the Company issued  senior notes (the  "Senior Notes")
totaling $16,500,000 at  9.50%, maturing on April 1, 2001.   The proceeds from
these  notes  were  used  to  retire  the  bank  loan  outstanding  under  the
aforementioned Credit Agreement and to liquidate an intercompany loan  between
ACCEL and  an insurance  subsidiary.  In  addition, as of  January 1,  1996, a
subsidiary  of  the  Company entered  into  a  reinsurance  agreement with  an
unaffiliated company to reinsure the in-force Credit Business.  This agreement
is structured, such, that as future  profits emerge on this block of business,
a substantial portion of the Company's share of the profits will be used  over


the  next four  to five  years to pay  the interest  thereon and  redeem these
Senior Notes.

NOTE E--REINSURANCE

During 1995, the Company had an agreement in place which covered a substantial
portion  of its  credit  insurance  business.    The  agreement  contained  an
experience adjustment computation that  resulted in the ultimate cost  of this
agreement being a  stated percentage  related to the  business covered by  the
agreement.   The  Company  ultimately  retained  a  substantial  part  of  the
insurance risk, the underwriting income  or loss and the investment income  on
net funds.

The  Company determined that deposit  accounting is the  appropriate method of
accounting for  this agreement  since it  is not  reasonably possible  for the
reinsurer to realize a  significant loss from the transaction.   The unaudited
consolidated financial statements have been prepared on this basis.

On  January  1,  1996 the  Company  terminated  this  quota share  reinsurance
agreement and elected  to recapture  the liabilities subject  to this  treaty.
The  liabilities recaptured thereunder  were then available  for cession under
the treaty described below.

Concurrent with  this  termination, the  Company  entered into  a  reinsurance
agreement with a  different unaffiliated reinsurer (which is also the buyer of
the Senior Notes discussed in Note D) to reinsure a substantial portion of the
in-force credit life and accident and health insurance business, including the
amounts recaptured.

This agreement  is structured in such  a way that as future  profits emerge on
this block  of business, a substantial  portion of the Company's  share of the
profits will be used over the next four to five years to pay fees and interest
to  the  reinsurer  and  redeem  the new  Senior  Notes  of  $16,500,000.   In
connection  with  this agreement,  approximately  $40,000,000  of assets  were
transferred  to the  reinsurer  on December  29,  1995, as  agreed  to by  all
parties.  The  unearned premium  reserves and liability  for insurance  claims
subject  to  cession  under  this  treaty  were  $29,756,000  and  $8,018,000,
respectively, as of September 30, 1996.

Prior  to December 31,  1995, a security  fund had been  maintained, primarily
comprised of fixed maturities, for the  benefit of the reinsurer.  Pursuant to
the  termination  of the  agreement effective  January  1, 1996,  as discussed
above,  certain investments were liquidated from the security fund on December
29, 1995.    Proceeds from  this  liquidation, along  with other  funds,  were
transferred  on  December 29,  1995  to  the reinsurer  who  is  party to  the
agreement dated January 1,  1996.  These amounts are  included in "Reinsurance
Premium Deposits" on the accompanying unaudited consolidated balance sheets as
of December 31, 1995.

Effective  January 1, 1996, the  Company entered into  a reinsurance agreement
with  the  same  unaffiliated  reinsurer   referenced  above  to  reinsure   a
substantial  portion  of the  credit life  and  accident and  health insurance
produced  in  1996.     This  agreement  contains  an  experience   adjustment
computation that results in the ultimate cost of this agreement being a stated
percentage related to the business covered by the agreement.
The  Company uses  the  deposit accounting  method for  recording transactions
under both of the reinsurance agreements effective January 1, 1996.


               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


NOTE E--REINSURANCE--(CONTINUED)


The following data  summarizes certain  aspects of  the Company's  reinsurance
activity for the periods presented.

Premiums written and earned in 1996 and 1995 are summarized as follows:

                           WRITTEN                          EARNED          
                                 Period Ended September 30,    
                  Nine Months    Three Months     Nine Months    Three Months
                     Ended           Ended           Ended           Ended
                 1996    1995    1996    1995    1996    1995    1996    1995
                                    (Thousands of dollars)

Direct         $45,214 $39,145 $13,930 $13,527 $38,922 $38,444 $13,775 $13,849
Assumed          3,938   4,524   1,358   1,770   4,864   4,645   2,132   1,732
Ceded           11,395  10,454   3,969   3,413   9,956  13,148   3,643   5,260
               ------- ------- ------- ------- ------- ------- ------- -------

Net premiums   $37,757 $33,215 $11,319 $11,884 $33,830 $29,941 $12,264 $10,321

Policy benefits incurred for the periods presented are as follows:

                           Nine Months Ended        Three Months Ended 
                           1996         1995          1996        1995 
                                      (Thousands of dollars)

Direct                    $ 15,125    $ 18,494      $ 6,321     $ 6,385
Assumed                      2,993       2,680        1,124       1,026
Ceded                           87       8,243           (9)      2,591
                           -------     -------     --------     -------

Net policy benefits       $ 18,031    $ 12,931      $ 7,454     $ 4,820
                          ========    ========     ========    ========

NOTE F--PROPERTIES

Since July 1981 the Company's executive offices have been located at 475 Metro
Place  North, Dublin, Ohio.  The four-story  office building had been owned by
Acceleration Life  Insurance Company ("ALIC"),  a wholly  owned subsidiary  of
ACCEL, and consists of approximately 80,000 square feet of office space.

On March 21,  1996, the building was sold by ALIC  to an unrelated party for a
price of  $3.5 million.   The Company realized  a pre-tax gain of  $170,000 on
this  sale.  The Company will remain  in the building and occupy approximately
16,000 square feet of  home office space under a five-year  lease at an annual
rental of approximately $256,000.

NOTE G--COMMITMENTS AND CONTINGENCIES

Due to the nature  of its operations, the Company  is at all times  subject to
pending and threatened  legal actions which arise in the  normal course of its
activities.  In management's opinion, based on the advice of outside  counsel,
the  unaudited  consolidated  financial  statements  will  not  be  materially
affected  by the  ultimate  outcome of  any  legal proceedings  or  contingent
liabilities.

On October  7, 1994, the  Liquidation Bureau of  the New York  State Insurance
Department (the "Liquidation Bureau") took control of Galaxy Insurance Company
("Galaxy"), which  prior to  the commencement  of liquidation proceedings  had
been an indirect wholly-owned subsidiary of  the Company, pursuant to an order
of  liquidation of the  New York Supreme  Court.  Prior to  the liquidation of
Galaxy,  Acceleration National  Insurance Company  ("ANIC"), the  property and
casualty  insurance company  subsidiary  of the  Company,  had issued  certain
certificates  of suretyship  ("Certificates") with  respect to  certain Galaxy
insurance  policies  each  of  which  provided  that  ANIC  would  assume  the
responsibilities  of  Galaxy  under  the  specified  policy  if Galaxy  became
insolvent  or financially  unable to  meet its  obligations on  the underlying


policy,  but  only  if  certain  conditions  were  met.    In particular,  the
Certificates provided that ANIC's assumption of liability was  contingent upon
the  insured's  executing  and   delivering  all  agreements,  assignments  or
evidences  of subrogation  satisfactory to  ANIC respecting  payments  made or
liabilities assumed.

               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


NOTE G--COMMITMENTS AND CONTINGENCIES--(CONTINUED)

In  May  1996, the  Liquidation  Bureau,  acting on  behalf  of  the New  York
Property/Casualty  Insurance Security  Funds (the  "Guaranty Fund"),  during a
meeting with Company  representatives informally advised  the Company that  on
behalf  of  the  Guaranty   Fund  it  intended  to  seek   indemnification  or
reimbursement  from  ANIC  for claims  paid  by the  Guaranty  Fund  to Galaxy
insureds on policies  which may have  been covered by  the Certificates.   The
Liquidation  Bureau has provided some information in response to the Company's
request  for accounting  data  and  other  information  with  respect  to  the
Liquidation Bureau's analysis of the Guaranty Fund's right to indemnification;
however,  the  Company is  not  yet  able to  quantify  the  magnitude of  the
potential  claim, if any, for  indemnification or reimbursement.   The Company
has  taken  the  position  that  the  Guaranty  Fund  has  no  right  to  seek
indemnification unless  Galaxy insureds who hold  properly issued Certificates
have executed assignments  and evidences of subrogation.   Even if any  Galaxy
insured  properly made  such a claim  directly to  ANIC, the  Company has been
advised by counsel  that if ANIC paid any such claim, it would have the right,
under assignment and subrogation  agreements with its insureds, to  assert all
rights that the insureds could have asserted to recover the  loss amounts from
any other source, including the Guaranty Fund.

The  Company intends  to fully  investigate each  claim which  the Liquidation
Bureau, acting on behalf of the Guaranty Fund, formally asserts is entitled to
the  benefits of  a  Certificate to  determine  whether such  Certificate  was
properly endorsed by ANIC and issued with proper authority and  if so, whether
proper  agreements,  assignments  and   evidences  of  subrogation  have  been
executed.    The  Company   intends  to  vigorously  defend  any   claims  for
indemnification  or reimbursement made by the Liquidation Bureau, on behalf of
the Guaranty Fund, with respect to  the Certificates.  Although the Company is
not  in  a position  to estimate  the magnitude  of  the potential  claims for
indemnification  or reimbursement,  it  does  not  believe that  the  ultimate
resolution of such claims will have a material adverse affect on the financial
condition or results of operations of the Company.

NOTE H--STOCK OPTION AGREEMENT

On  May 23, 1995, Mr.  Friedberg was elected  Chairman & CEO of  ACCEL and Mr.
Coats  was   elected  Executive   Vice  President   and  President   of  ANIC.
Accordingly,  Mr. Friedberg and Mr.  Coats became Key  Employees under ACCEL's
1987  Stock Incentive Plan.  Under the  terms of their arrangement with ACCEL,
both were granted stock options for ACCEL's common stock in lieu of salary for
their first year of service.   Mr. Friedberg was granted an option for 100,000
shares and Mr. Coats for 50,000 shares.  The  grant price for both options was
$2.125, the  fair value of  ACCEL's common stock  on the date  of grant.   The
options  vested immediately and become exercisable one year following the date
of grant; however,  they would become exercisable immediately upon either a) a
change of  control of ACCEL,  or b) an  involuntary termination.   The options
would be forfeited if  employment with ACCEL was voluntarily  terminated prior
to May 23, 1996.
The options lapse five years from the effective date of the grant.  

At the end of their first year of service, Messrs. Friedberg and Coats' status
was evaluated  by the Compensation Committee  and based on the  value of their
services,  commenced to  receive  compensation effective  June  1, 1996.    In


addition, Mr. Friedberg  and Mr. Coats  were granted options  pursuant to  the
1996  Stock Incentive  Plan as  of  August 28,  1996, for  110,000 and  55,000
shares,  respectively, at a grant price  equal to the price  of ACCEL stock at
the  close of the market on the date of grant and otherwise according to terms
identical to the aforementioned options granted on May 23, 1995.






               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS

                  Operating Results for the Nine Months Ended
                   September 30, 1996 and September 30, 1995


OPERATING RESULTS

The income  before federal income taxes and an extraordinary item for the nine
months ended September 30, 1996 was $426,000 compared  to income of $1,209,000
for the same  period in 1995.   The income before federal income  taxes and an
extraordinary  item for the three months ended September 30, 1996 was $374,000
compared to $475,000 for the same period in 1995.  The reduction in income for
the nine months  ended September 30, 1996 can be  attributed to several items.
In the third quarter  of 1996, the Company received $1,400,000  representing a
partial  payment  of  a  judgement  rendered  in  favor  of the  Company  (see
Discontinued Realtors Errors and  Omissions Program in Certain Events).   This
other  income has  been offset  by reserve  strengthening on  the discontinued
Agriculture lines, reserve  strengthening on the Company's credit business and
the write down of an investment.

The  third quarter results have been affected by the aforementioned $1,400,000
income  item partially offset by increases in policy benefits on the Company's
credit business, reserve strengthening on  runoff lines of business ($500,000)
and the write down of an investment ($150,000). 

The Company's  new  Property and  Casualty  programs produced  $14,300,000  of
annualized  premium in the first nine months  of 1996; $4,600,000 in the first
quarter, $5,700,000 in the second quarter and $4,000,000 in the third quarter.
Approximately $1,500,000 of this total  relates to the commercial  multi-peril
policies issued  to auto dealers which has now been discontinued.  As this new
Property and Casualty premium earns, its effect on the bottom line will become
increasingly more pronounced.

REVENUE

Premium writings for  the nine  months ended  September 30,  1996, were  $49.2
million compared to $43.7 million for the same period in 1995.   This increase
was due to  writings in the aforementioned new  Property and Casualty programs
of $14.3 million  partially offset by  a decrease in  premium written of  $4.9
million in credit insurance and decreases in discontinued Agriculture lines.

Premium written  for  the three  months ended  September 30,  1996, was  $15.3
million compared to essentially the same for the same period in 1995.  Several
offsetting changes resulted in  the similar premium written numbers.   Premium
written under the new Property and Casualty programs increased by $4.0 million
offset by  a decrease in premium  written of $2.8 million  in credit insurance
and decreased premium in discontinued Agriculture lines.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash flows  from operations have generally been adequate for its
current operating  needs.  Cash flows  from operating activities in  1995 were
adversely impacted by the reinsurance transaction dated December 29, 1995 (See


Note E--Reinsurance).  The Company's credit insurance policy terms and related
liabilities  are  generally limited  to a  four-year  period during  which the
consumer  makes payments  on the  loan.   The Company's liability  on extended
service contracts typically  extends for either one-year or five-year periods.
The Company's long haul trucking and charter bus business generally is written
for a term of one  year with the casualty claim related  liabilities extending
beyond  that period.    The Company,  therefore,  maintains liquidity  in  its
investment portfolio to correspond with the liability outstanding on its lines
of business.  At September  30, 1996, the estimated duration of  the Company's
fixed income investment portfolio was 2.75 years while the estimated liability
duration was approximately 3.5 years.   Currently, an interest rate change  of
1%  would  impact  the  market  value  of  the  fixed  maturity portfolio  and
stockholders'  equity by a decline  of approximately $1.8  million if interest
rates rose  and an  increase of approximately  $1.8 million if  interest rates
declined.


The mortgage and asset-backed  securities held by  the Company are subject  to
risks associated with  variable prepayments.   As such,  these securities  may
have  a different  actual  maturity and  yield  than planned  at  the time  of
purchase.  The degree to  which a security is  susceptible to either gains  or
losses  is influenced by  the difference  between its  amortized cost  and par
value,  relative sensitivity of the underlying mortgages to prepayment risk in
a changing interest rate  environment and relative priority of  the securities
in the overall securitization.

The  Company limits the  extent of its  risks on fixed  maturity securities by
generally  avoiding  securities  whose  cost  significantly  exceeds  par,  by
purchasing   securities  which  are  backed  by   stable  collateral,  and  by
concentrating on securities that are either planned amortization or sequential
pay  classes.   The  collateralized  mortgage  obligations  and  asset  backed
securities  owned  have primarily  short to  intermediate  average lives.   At
September 30,  1996, the Company did  not have a significant  amount of higher
risk mortgage or asset backed securities.  There are negligible  default risks
on the mortgage  and asset backed  security portfolio as  a whole as  the vast
majority  of the  assets are  either guaranteed  by U.S.  government-sponsored
entities or are supported in the securitization structure by junior securities
enabling the assets to achieve high investment grade status.

Ohio domiciled insurance companies are subject to Ohio law which regulates the
ability of  insurance companies to pay  dividends.  The  regulation limits the
annual dividend or distribution of an insurer to the greater of (1) net income
of the previous  year or (2) 10%  of unassigned surplus as  of the end of  the
previous year.   In addition, all  dividends must come from  earned surplus to
qualify as  a non-extraordinary dividend.  Amounts  greater than this would be
considered extraordinary dividends and could not be paid without permission of
the Department of  Insurance of the State of Ohio  ("Ohio Department").  Based
on this regulation, Acceleration  Life Insurance Company ("ALIC") could  pay a
dividend of $8,000  and Acceleration National Insurance Company ("ANIC") would
require Ohio Department approval to pay any dividend to  the registrant during
1996.

The  Company's cash flow projections for 1996  assume that certain events will
take place in order to have sufficient cash to meet its debt service and other
requirements.   One of these  events included the  liquidation of Acceleration
Insurance Company Limited ("AICL"),  which was concluded in the  first quarter
of 1996.    The Company  will  monitor its  current  and future  debt  service
requirements to coincide with cash flow availability.  The Company  has used a
portion of the proceeds  from the Rights Offering and a partial payment from a
judgement entered  in its favor in a legal proceeding (see Rights Offering and
Discontinued Realtors'  Errors and Omissions Program under  CERTAIN EVENTS) to
repay $2,647,000 in  advances received in 1992 and  1993 from the registrant's
subsidiaries.    The Company  intends  to  retire the  remaining  intercompany
balance  ($1,600,000)  in  the fourth  quarter  of  1996.   These  outstanding
advances are eliminated in consolidation.


On July 25, 1996, the Company commenced an offering of non-transferable rights
to  stockholders of  record as  of June  18, 1996  (see Rights  Offering under
Certain  Events).   The  Rights  Offering  concluded on  August  28, 1996  and
generated  $3,261,780 in cash proceeds.  A supplemental offering to employees,
agents and customers  concluded on  September 30, 1996  generated $141,862  in
cash proceeds  of  which $110,812  had  been received  by  the Company  as  of
September 30, 1996.   The cash proceeds from these offerings have been used to
repay intercompany  advances ($2,647,000), for the  redemption of Subordinated
Notes which  were not tendered in the rights offering ($600,000) (See Note D--
Notes Payable), and for general corporate purposes.

Also, under the provisions of the Rights Offering, the Company  permitted CIHC
and its affiliate to  tender the principal amount of  their Subordinated Notes
(See  Note D--Notes  Payable) for  cancellation as  consideration (in  lieu of
cash)  for  the purchase  of shares  of Common  Stock  pursuant to  the Rights
Offering.  On  August 23,  1996, CIHC  and  its affiliate  tendered $5,619,046
principal amount of  their Subordinated  Notes plus an  additional $83,759  of
accrued  interest thereon  under the  terms of  the Rights  Offering.   At the
conclusion of the offering, CIHC  and its affiliate had reduced  their holding
of Subordinated Notes to $0.

In  a  separate  transaction,  Accel  retired  $731,533  principal  amount  of
Subordinated  Notes  held by  an unrelated  third  party for  consideration of
$600,000.    Accel recognized  an extraordinary  gain  on this  transaction of
$131,533.  No  Federal Income Tax was  recognized related to this gain  due to
the current consolidated tax position  of the Company.  The result  of the two
aforementioned transactions was to retire all outstanding Subordinated Notes. 

On December 29, 1995, the Company issued new senior notes (the "Senior Notes")
totaling $16,500,000 at 9.50%, maturing  on April 1, 2001.  The  proceeds from
these  notes were  used to retire  a bank  loan outstanding  under an existing
Credit  Agreement (See Note D--Notes Payable) and to liquidate an intercompany
loan between ACCEL and an insurance subsidiary.  In addition, as of January 1,
1996 ALIC entered into a reinsurance agreement with an unaffiliated company to
reinsure  its in-force Credit Business.   This agreement  is structured, such,
that as future profits emerge on this block of business, a substantial portion
of the Company's share of the profits will be  used over the next four to five
years to pay the interest thereon and redeem these Senior Notes.

ACCEL's  Board of Directors approved an Employee Stock Ownership Plan ("ESOP")
during 1989.  In 1990, the ESOP entered into  an agreement with ALIC to borrow
up  to  $1,000,000  for  the  purchase  of  ACCEL's  common  stock.    Company
contributions into the  ESOP have been used to pay down the loan from ALIC and
release  shares into  the  participants' accounts  as  the Company's  matching
contribution.  The  ESOP purchased 136,887  shares (adjusted for  the 1990  5%
common stock  dividend) under  this  loan agreement  with ALIC  at  a cost  of
$1,000,000.  In addition to the shares purchased under the loan agreement, the
ESOP purchased 90,088  common shares at  a cost of  $603,000.  The  loan bears
interest at 10%.

At December 31, 1995, the loan had  an unpaid balance of $525,239.  The market
value  of the underlying shares was $161,000.   The Company revalued this loan
to market value  as of  December 31,  1995.  This  will allow  the release  of
shares  to participants'  accounts  at an  average  price which  more  closely
approximates recent market values on the Company's stock.  The decrease in the
loan in  1995 has  been  reflected through  a decrease  in additional  paid-in
capital in the accompanying unaudited consolidated balance sheets.  The unpaid
balance of  the loan ($49,000 at  September 30, 1996 and  $161,000 at December
31, 1995) has been reflected as  a reduction in common stockholders' equity in
the accompanying unaudited consolidated financial statements.

The Company  currently has  two material business  lines that  are in  run-off
status:  the realtors' errors  and omissions ("REO") line and  the farmowner's
multi-peril and ancillary inland marine products ("Agriculture").

The estimates for policy reserves are continually under review and adjusted as


necessary  as  experience  develops or  new  information  becomes known;  such
adjustments  are  included  in  current  operations.    These liabilities  are
necessarily  subject  to  the impact  of  future  changes  in claim  severity,
frequency and other factors.  Although considerable variability is inherent in
such  estimates,   based  on  recent  evaluations   conducted  by  experienced
consultants and internal reviews, management  believes that the current  level
of  policy reserves will be  adequate to cover  anticipated claim liabilities.
However, because the REO risk was  written from the first quarter 1986 through
the  first quarter of 1991; and considering the length of time involved in the
settlement of some claims, there remains  a lack of credible experience needed
to  determine  whether actual  incurred policy  benefits  will conform  to the
assumptions  inherent in the determination of these liabilities.  In addition,
outstanding claims on the Company's discontinued Agriculture lines are subject
to  variability  due  to  the  length  of time  that  has  elapsed  since  the
termination of the program and the nature of some of the claims.  Accordingly,
the  ultimate  amounts required  for settlement  of  policy benefits  may vary
significantly  from  the  amounts   included  in  the  accompanying  unaudited
consolidated financial statements.

The  Company  has  reviewed  Financial  Accounting  Standards  Board  ("FASB")
Statement No. 121, "Accounting for the Impairment of Long-Lived Assets and for
Long-Lived  Assets to Be Disposed Of" which  became effective in 1996, and has
determined this FASB  Statement will not impact the Company.   The Company has
also   reviewed  FASB   Statement   No.  123,   "Accounting  for   Stock-Based
Compensation"  which became  effective in  1996.   The Company has  decided to
disclose  the impact  of FASB  123 in  a footnote  to the  annual consolidated
financial  statements and  not  adopt the  statement  for financial  statement
reporting as  permitted by  FASB  123.   The Company  has  also reviewed  FASB
Statement  No. 125 "Accounting for Transfers and Servicing of Financial Assets
and  Extinguishments of Liabilities" which becomes effective in 1997, and does
not  expect this  FASB Statement to  have a  material impact  on the financial
condition of the Company.

Although the cumulative effects of inflation on premium growth cannot be fully
determined,  increases  in  the retail  price  of  automobiles  have generally
resulted in increased  amounts being  financed which constitute  the basis  of
premiums charged for  credit insurance.   Anticipated increases in  automobile
repairs  also  provide the  primary basis  for  increases in  extended service
contract premium rates.


CERTAIN EVENTS

RIGHTS OFFERING:  On July 25,  1996, the Company commenced the Rights Offering
to  stockholders  of  record  as  of  June  18,  1996.   The  non-transferable
subscription rights entitled stockholders  of record to receive one  right for
each  share of  stock  held and  each  right entitled  the  holder thereof  to
purchase one  and one-half  shares of  the common stock  of the  Company at  a
subscription  price of  $2.25 per  share.   The rights  expired at  5:00 p.m.,
Eastern Standard time, on August 28,  1996.  No commission or compensation was
paid in connection  with the Rights Offering.  As part of the Rights Offering,
the Company  permitted the outstanding Subordinated Notes held by CIHC and its
affiliate  to be tendered for cancellation as  consideration (in lieu of cash)
for the purchase of shares of common stock pursuant to the Rights Offering.

A total of  3,984,260 shares were  subscribed for under  the Rights  Offering.
Total  consideration of  $8,964,585  consisted of  $5,702,805 in  Subordinated
Notes and $3,261,780 in cash.  

Subsequent  to  the  rights  offering, the  Company  commenced  a Supplemental
Offering to employees, agents  and customers which concluded on  September 30,
1996.   Shares  were offered  under  this Supplemental  Offering at  $2.25 per
share.  A total of 63,050 shares were subscribed for under this offering.   No
soliciting  fees or  other  compensation were  paid  in connection  with  such
offering.  The net cash proceeds from these  offerings have been used to repay
intercompany advances  ($2,647,000), for the redemption  of Subordinated Notes


which  were not  tendered in the  Rights Offering  ($600,000) and  for general
corporate purposes.  

CLAIMS  ASSERTED BY LIQUIDATION BUREAU  UNDER CERTIFICATES OF  SURETYSHIP:  On
October  7,  1994, the  Liquidation  Bureau of  the New  York  Department (the
"Liquidation  Bureau") took control of  Galaxy (a New  York domiciled Property
and  Casualty   Company,  "Galaxy"),  which  prior  to   the  commencement  of
liquidation proceedings  had been an  indirect wholly-owned subsidiary  of the
Company, pursuant  to an order of  liquidation of the New  York Supreme Court.
Prior to the liquidation of Galaxy,  ANIC, the property and casualty insurance
company  subsidiary  of  the  Company,  had  issued  certain  certificates  of
suretyship ("Certificates") with respect  to certain Galaxy insurance policies
each of which provided  that ANIC would assume the  responsibilities of Galaxy
under the specified policy if Galaxy became insolvent or financially unable to
meet its obligations on the underlying  policy, but only if certain conditions
were met.  In particular, the Certificates  provided that ANIC's assumption of
liability  was contingent  upon  the insured's  executing  and delivering  all
agreements,  assignments  or evidences  of  subrogation  satisfactory to  ANIC
respecting payments made or liabilities assumed.

In  May  1996, the  Liquidation  Bureau,  acting on  behalf  of  the New  York
Property/Casualty  Insurance Security  Funds (the  "Guaranty Fund"),  during a
meeting with  Company representatives informally  advised the Company  that on
behalf  of  the  Guaranty   Fund  it  intended  to  seek   indemnification  or
reimbursement  from  ANIC for  claims  paid  by the  Guaranty  Fund to  Galaxy
insureds on  policies which may  have been covered  by the Certificates.   The
Liquidation  Bureau has provided some information in response to the Company's
request  for accounting  data  and  other  information  with  respect  to  the
Liquidation Bureau's analysis of the Guaranty Fund's right to indemnification;
however,  the  Company is  not  yet  able to  quantify  the  magnitude of  the
potential  claim, if any, for  indemnification or reimbursement.   The Company
has  taken  the  position  that  the  Guaranty  Fund  has  no  right  to  seek
indemnification unless  Galaxy insureds who hold  properly issued Certificates
have executed assignments  and evidences of  subrogation.  Even if  any Galaxy
insured properly  made such  a claim  directly to ANIC,  the Company  has been
advised by counsel  that if ANIC paid any such claim, it would have the right,
under assignment and subrogation  agreements with its insureds, to  assert all
rights that the insureds could have  asserted to recover the loss amounts from
any other source, including the Guaranty Fund.

The  Company intends  to fully  investigate each  claim which  the Liquidation
Bureau, acting on behalf of the Guaranty Fund, formally asserts is entitled to
the  benefits of  a  Certificate to  determine  whether such  Certificate  was
properly endorsed by ANIC and issued  with proper authority and if so, whether
proper agreements, assignments and evidence of subrogation have been executed.
The Company intends  to vigorously  defend any claims  for indemnification  or
reimbursement made by the Liquidation
Bureau, on  behalf of  the Guaranty  Fund, with  respect to  the Certificates.
Although the  Company is not  in a position to  estimate the magnitude  of the
potential claims  for indemnification  or reimbursement,  it does  not believe
that  the ultimate  resolution of  such  claims will  have a  material adverse
affect on the financial condition or results of operations of the Company.

DISCONTINUED REALTORS' ERRORS AND OMISSIONS PROGRAM:  Litigation was commenced
in 
November, 1991, to recover losses sustained in the REO program  which resulted
in $5.3 million being awarded to Accel in December, 1995.

Pursuant  to settlements  reached  with  all  the  parties  earlier  in  1996,
$1,541,085 was  received  by Accel  as  of September  30,  1996 and  has  been
recognized as other income  for the nine months ended September 30,  1996.  An
additional $2,750,000 was received on November 8, 1996 and will be  recognized
as  other income  in the  fourth quarter of  1996.   This resulted  in a total
recovery  of $4,291,085.  With the approval  of the Department of Insurance of
the State of  Ohio, the proceeds from the settlement  are being shared equally
between Accel  and ANIC.  The Company requested the sharing arrangement due to


the continuing losses in the REO Program realized by ANIC since 1991.



PART II.   OTHER INFORMATION


ITEM 6.    Exhibits and Reports on Form 8-K

     (b)   No reports on Form 8-K have been filed by the Registrant during the
           quarter ended September 30, 1996.


                                   SIGNATURE


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.

                                              ACCEL INTERNATIONAL CORPORATION

Dated:         November 13, 1996              By:  /S/  Kurt L. Mueller       
        ------------------------------             --------------------------
                                                   Kurt L. Mueller
                                                   Vice  President,  Treasurer
and
                                                   Controller*
_____
*  Mr.  Mueller is Vice President, Treasurer and  Controller and has been duly
   authorized to execute the report on behalf of the Registrant.