<PAGE>   1
                                    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 MARCH 31, 2000

[ ]   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934 (NO FEE REQUIRED)

FOR THE TRANSITION PERIOD FROM           TO


COMMISSION FILE NUMBER 0-8162

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

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

     75 WEST STREET, SIMSBURY, CT                                               06070
    (Address of principal executive offices)                                  (Zip Code)
</TABLE>

                                  860-843-7600
                         (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 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 April 30, 2000, there were 9,084,004 shares of Common Stock, $.10 par
value per share outstanding.
<PAGE>   2
                                                      COMMISSION FILE NO. 0-8162




                  ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                                   MARCH 31, 2000

                                        INDEX



PART I -- FINANCIAL INFORMATION

<TABLE>
<CAPTION>
      Item 1.  Financial Statements                                                        Page
                                                                                           ----
<S>                                                                                       <C>
            Consolidated Balance Sheets
               March 31, 2000 (unaudited) and December 31, 1999                             3 -  4

             Consolidated Statements of Operations
                 Three months ended March 31, 2000 (unaudited) and 1999                          5

            Consolidated Statements of Common Stockholders' Equity
                  Three months ended March 31, 2000 (unaudited)
                 and year ended December 31, 1999                                                6

             Consolidated Statements of Cash Flows
                  Three months ended March 31, 2000 (unaudited) and 1999                         7

            Notes to Unaudited Consolidated Financial Statements                            8 - 13

      Item 2. Management's Discussion and Analysis of Financial
               Condition and Results of Operations                                         14 - 17

      Item 3.Quantitative and Qualitative Disclosures About Market Risk                         18

PART II -- OTHER INFORMATION

      Item 6.  Exhibits and Reports on Form 8-K                                                 19
            Signature                                                                           20

            Exhibit 27.0                                                                        21
</TABLE>


                                       2
<PAGE>   3
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                March 31,    December 31,
                                                                  2000          1999
                                                                 -------       -------
                                                               (Unaudited)
ASSETS                                                           (Thousands of dollars)
<S>                                                              <C>           <C>
Investments
    Investments available for sale, at fair value:
      Fixed maturities (cost: 2000--$14,288,000;
          1999--$21,592,000)                                     $13,862       $21,012
      Short-term investments, at cost
         (which approximates market value)                         1,735         1,358
                                                                 -------       -------
                                                                  15,597        22,370

Cash                                                                 657            --

Receivables:
    Premiums in process of transmittal, less
      allowance (2000--$0; 1999--$359,000)                             8         1,637
    Amounts due from reinsurers                                   40,326        45,671
    Other accounts receivable                                        834            --
                                                                 -------       -------
                                                                  41,168        47,308

Accrued investment income                                            210           234
Prepaid reinsurance premiums                                       1,439         1,918
Deferred policy acquisition costs                                     59           280
Equipment--at cost, less accumulated
    depreciation (2000--$1,136,000;  1999--$1,066,000)               554           444
Other assets                                                         909           481
Intangible assets                                                  6,305            --
                                                                 -------       -------
                                                                   9,477         3,357
                                                                 -------       -------




Total assets                                                     $66,899       $73,035
                                                                 =======       =======
</TABLE>


                                                                     (Continued)


                                       3
<PAGE>   4
                 ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS -- (CONTINUED)


<TABLE>
<CAPTION>
                                                                March 31,      December 31,
                                                                  2000           1999
                                                                --------        --------
                                                                       (Unaudited)
     LIABILITIES AND STOCKHOLDERS' EQUITY              (Thousands of dollars, except share data)
<S>                                                             <C>             <C>
Policy Reserves and Liabilities:
    Unearned premium reserves                                   $  1,782        $  3,125
    Insurance claim reserves                                      51,543          59,421
                                                                --------        --------
                                                                  53,325          62,546
Other Liabilities:
    Notes payable                                                  4,408              --
    Bank overdrafts                                                   --           3,714
    Amounts withheld for others                                      122             122
    Unearned commissions                                             371              --
    Deferred reinsurance commissions                                   3             114
    Amounts due reinsurers                                           656             828
    Accounts payable and other liabilities                         2,124             653
    Consideration payable related to acquisitions                    769              --
    Current federal income taxes                                      --             172
                                                                --------        --------
                                                                   8,453           5,603
                                                                --------        --------
                                                                  61,778          68,149
                                                                --------        --------
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 (2000 and 1999--15,000,000)
       Issued shares (2000--9,997,236; 1999--9,468,196)            1,000             947
    Additional paid-in capital                                    33,328          32,659
    Accumulated deficit                                          (21,819)        (21,178)
    Less treasury shares at cost (2000 and 1999--913,230)         (6,962)         (6,962)
    Accumulated other comprehensive loss                            (425)           (580)
                                                                --------        --------
                      Net stockholders' equity                     5,122           4,886
                                                                --------        --------


    Total liabilities & stockholders' equity                    $ 66,899        $ 73,035
                                                                ========        ========
</TABLE>


See notes to unaudited consolidated financial statements.


                                       4
<PAGE>   5
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                           Three Months Ended March 31,
                                                              2000              1999
                                                          -----------        -----------
                                                              (thousands of dollars)
                                                           (Unaudited)
<S>                                                       <C>                <C>
REVENUE:
         Gross premiums written                           $       332        $     8,539
         Less reinsurance ceded                                   103              2,768
                                                          -----------        -----------
                Net premiums written                              230              5,771
         Decrease in unearned premium reserves                    865                102
                                                          -----------        -----------
                Net premiums earned                             1,095              5,873
         Net investment income:
                Interest and dividends                            291                475
                Net realized capital (losses) gains              (239)                 1
         Equity in loss of affiliated company                      --                (22)
         Service fee revenue                                      623                 --
         Commission revenue                                     2,265                 --
         Other income                                              46                 18
                                                          -----------        -----------
                                                                4,079              6,345
                                                          -----------        -----------
BENEFITS AND EXPENSES:
         Loss and loss adjustment expenses                        912              4,325
         Commissions and other sales                              771              1,711
         Reinsurance expense recovery                            (111)              (772)
         General and administrative expenses                    2,779              1,549
         Taxes, licenses and fees                                 126                392
         Amortization expense                                     116                 --
         Interest expense                                          79                 --
         Decrease in deferred policy
                acquisition costs                                 221                399
                                                          -----------        -----------
                                                                4,892              7,604
                                                          -----------        -----------

LOSS BEFORE FEDERAL INCOME TAXES                                 (813)            (1,259)

         Federal income taxes:
                Current (benefit)                                (172)                --
                Deferred expense                                   --                 --
                                                          -----------        -----------
                                                                 (172)                --
                                                          -----------        -----------

NET LOSS                                                  $      (641)       $    (1,259)
                                                          ===========        ===========

Net loss per common share--basic                          $     (0.07)       $     (0.15)

Net loss per common share--assuming dilution              $     (0.07)       $     (0.15)
                                                          ===========        ===========

Weighted average number of common
         shares outstanding                                 8,819,985          8,554,966
                                                          ===========        ===========
</TABLE>



                                       5
<PAGE>   6
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES
             CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY

                             (Thousands of dollars)
<TABLE>
<CAPTION>
                                                                                                           Accumulated
                                                                   Additional                  Common        other
                                                       Common       paid-in     Accumulated   stock held   comprehensive
                                                       stock        capital       deficit    in treasury      loss           Net
                                                       ------      ----------   -----------  -----------   -------------   -------

<S>                                                    <C>         <C>          <C>          <C>           <C>             <C>
Balances at December 31, 1998                          $  947       $32,659       $ (3,933)    $(6,962)       $ 390        $ 23,101
       Comprehensive loss:
               Net loss                                    --            --        (17,245)         --           --         (17,245)
               Other comprehensive loss-
                 change in net unrealized losses
                 on investment securities                  --            --             --          --         (970)           (970)
                                                       ------       -------       --------     -------        -----        --------
               Comprehensive loss                          --            --        (17,245)         --         (970)        (18,215)
                                                       ------       -------       --------     -------        -----        --------
Balances at December 31, 1999                          $  947       $32,659       $(21,178)    $(6,962)       $(580)       $  4,886

       Comprehensive loss:
               Net loss                                    --            --           (641)         --           --            (641)
               Other comprehensive income-
                 change in net unrealized losses
                 on investment securities                  --            --             --          --          154             154
                                                       ------       -------       --------     -------        -----        --------
               Comprehensive loss                          --            --           (641)         --          154            (487)
       Issuance of 529,040 shares of
               Common Stock for Allegiance
               Insurance Managers purchase                 53           432             --          --           --             486
       Issuance of 560,000 warrants for
               Common Stock in conjunction with
               Notes Payable to Accel Finance Co.          --           237             --          --           --             237
                                                       ------       -------       --------     -------        -----        --------
Balances at March 31, 2000 (Unaudited)                 $1,000       $33,328       $(21,819)    $(6,962)       $(426)       $  5,122
                                                       ======       =======       ========     =======        =====        ========
</TABLE>


See notes to unaudited consolidated financial statements.


                                       6
<PAGE>   7
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                                 Three Months Ended March 31,
                                                                                    2000            1999
                                                                                   -------        -------
                                                                                    (Thousands of dollars)
OPERATING ACTIVITIES:
<S>                                                                                <C>            <C>
         Loss from continuing operations                                           $  (641)       $(1,259)
         Adjustments to reconcile income (loss) from continuing operations
                 to net cash used in by operating activities:
                        Equity method investment, net                                   --             22
                        Change in premiums receivable                                1,629            906
                        Change in accrued investment income                             24             23
                        Change in prepaid reinsurance premiums                         479          2,286
                        Change in premium deposits held                                 --             64
                        Change in unearned premium reserves                         (1,343)        (2,387)
                        Change in insurance claim reserves                          (7,878)           232
                        Change in amounts due to and from reinsurers                 5,173         (3,723)
                        Change in intangible assets                                 (6,305)            --
                        Change in other assets, other liabilities
                                and accrued income taxes                             1,239            561
                        Accrual of discount on fixed maturity securities                --             (4)
                        Amortization of premium on fixed maturity securities            11              8
                        Amortization of deferred policy acquisition costs              221          2,803
                        Policy acquisition costs deferred                               --         (2,404)
                        Reinsurance commissions earned                                (111)        (1,508)
                        Reinsurance commissions received                                --            905
                        Provision for depreciation and amortization                    187             65
                        Net realized losses on investments                             239             (1)
                                                                                   -------        -------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                                 (7,076)        (3,411)

INVESTING ACTIVITIES:
         Sale of investments available for sale                                      6,771          4,453
         Purchase of investments available for sale                                     --         (2,777)
         Other, net                                                                    280            (30)
                                                                                   -------        -------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                                  7,051          1,646
                                                                                   -------        -------

FINANCING ACTIVITIES:
         Change in Bank Overdafts                                                   (3,714)            --
         Issuance of Notes Payable                                                   4,408             --
         Repayment of notes payable                                                    (12)            --
                                                                                   -------        -------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                                    682             --
                                                                                   -------        -------
NET INCREASE (DECREASE) IN CASH                                                        657         (1,765)
Cash at beginning of year                                                               --          2,587
                                                                                   -------        -------
CASH AT END OF PERIOD                                                              $   657        $   822
                                                                                   =======        =======
</TABLE>


See notes to unaudited consolidated financial statements.


                                       7
<PAGE>   8
               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

             NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                MARCH 31, 2000


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 ("GAAP") 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 subsidiary, 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 GAAP 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, 1999.

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. Through the Company's wholly-owned subsidiary, Acceleration National
Insurance Company (ANIC), ACCEL was engaged in the underwriting and sale of
property-casualty insurance products, primarily concentrating, up to mid-1999,
on the commercial automobile line of business. Before ANIC announced, on July 2,
1999, its full exit from its current lines of business, it offered various
policies covering long-haul trucking, charter bus, limousine and paratransit
vehicle fleets, as well as other specialized products tailored to other groups
such as crane operators and gun dealers. ANIC offered these products through
general agents. ANIC exited this business due to its loss experience from 1998
and 1999. The Company ceased writing new policies of insurance and is
non-renewing its in-force policies. The net unearned premium reserve at March
31, 2000 is $1.8 million, a reduction of $8.3 million from the March 31, 1999
unearned premium reserve of $10.1 million. The net premiums written for the
three months ending March 31, 2000 are only $0.2 million compared to the three
months ending March 31, 1999 of $5.8 million. Management is pursuing efforts to
restructure the Company so that it can re-enter other areas of the insurance
market.

ANIC is subject to competition from other insurers throughout the states in
which it writes business. ANIC is also subject to regulation by the insurance
departments of states in which it is licensed, and undergoes periodic
examinations by those departments. Beginning May 2, 2000, the Ohio Department of
Insurance, the domiciliary regulator for ANIC, began an examination of the
financial affairs of ANIC for the years 1998 and 1999. Because of ANIC's Risk
Based Capital position at December 31, 1999, the Ohio Department of Insurance
requested the Company to file a RBC Plan with the Department by April 18, 2000.
The Company complied with the Department's request by the due date. On May 4,
2000, ANIC received an order of supervision from the Ohio Department of
Insurance ( see Note F ).

ACCEL is also in the agency business through its wholly-owned subsidiary,
Accelerated Agency Group (AAG), primarily selling non-standard automobile
insurance. Through its January 2000 purchase of Allegiance Insurance Managers
(AIM), ACCEL provides various insurance services including underwriting
management, actuarial support and claims administration.

PURCHASE TRANSACTIONS: On January 14, 2000, the Company acquired 100% of the
stock of Allegiance Insurance Managers. Gerald H. Pastor, FCAS, President, CEO
and principal shareholder of AIM was elected President & CEO of ACCEL's
subsidiary, ANIC in October, 1999 and of ACCEL in November, 1999. In
consideration for the acquisition, ACCEL assumed net liabilities of
approximately $300,000 and has issued 529,040 shares of its common stock to
shareholders of AIM, other than Pastor, and will issue an additional 997,036
shares to Pastor upon and subject to receipt of clearance by the Ohio Department
of Insurance. A liability has been established at March 31, 2000 for the value
of the consideration to be issued to Pastor in the amount of approximately
$770,000. Should the forgoing clearance not be received, ACCEL will issue to
Pastor such other consideration as may be mutually agreed upon by ACCEL and
Pastor, which may include a lesser number of shares of ACCEL common stock
(subject to the foregoing clearance) and/or other securities. Under the terms of
the transaction, ACCEL will also issue up to an additional 2,180,110 shares of
its common stock to the shareholders of AIM if the combined business meets
certain performance criteria over the six years after the acquisition. If the
business does not achieve certain cumulative earnings by December 31, 2002, the
former AIM shareholders will return 763,038 shares to ACCEL.

AIM operates as an underwriting manager, managing general agency, and claims
administrator for various programs, companies and clients. It will continue to
expand its operations in these areas. ANIC has placed all of its underperforming
products in run-off. Going forward, the primary focus of ACCEL and ANIC will be
the non-standard automobile line of business.


                                       8
<PAGE>   9
               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


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

Also on January 14, 2000, ACCEL completed arrangements for a credit facility of
$5,000,000. Terms of the facility are 10% interest payable quarterly, plus
280,000 warrants per $1,000,000 borrowed, at a price of $2.00 per share. All
monies owed under the facility will be due in full by December 31, 2003.
Applicable warrants will expire on December 31, 2004. As of March 31, 2000,
$2,000,000 of the facility has been drawn down and used for agency purchases,
resulting in the issuance of 560,000 warrants. A portion of the proceeds
received on the credit facility has been allocated to the warrants issued and
has been recorded as additional paid-in capital.

On January 19, 2000 ACCEL acquired the assets of Payless Insurance Agencies
("Payless"). Payless is comprised of two locations in the Fort
Lauderdale/Broward County area, specializing in non-standard automobile
insurance. On January 20, 2000 ACCEL acquired substantially all of the assets of
Unistar Florida Holdings, Inc. ("Unistar"), representing 49 agency locations
throughout the state of Florida, also specializing in non-standard automobile
insurance. ACCEL paid approximately $4,500,000 in cash and notes for all
agencies acquired. Both asset acquisitions were accounted for utilizing purchase
accounting and resulted in the recording of intangible assets of approximately
$4,480,000.

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 the liability
for insurance claims and claims adjustment expense reserves. 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 generally reflected in current operations.

INVESTMENTS: The Company classifies 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 fair value which approximates
cost.

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, 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 recognized by
writing the investment down to its fair value.

DEFERRED POLICY ACQUISITION COSTS: The costs (principally commissions and
certain expenses of policy issuance) of acquiring or renewing insurance
business, all of which vary with and are directly related to the production of
business, have been deferred. These deferred policy acquisition costs are
amortized in a manner related to the recognition of premiums earned. Anticipated
investment income is considered in determining recoverability of deferred costs.

EQUIPMENT AND DEPRECIATION: Equipment is carried at cost less accumulated
depreciation. Depreciation is provided using the straight-line method over an
estimated useful asset life of five years.

INTANGIBLE ASSETS; Intangible assets includes goodwill and other intangible
assets associated with purchase transactions, and are amortized over their
respective lives, up to ten years.

PREMIUM INCOME RECOGNITION AND UNEARNED PREMIUM RESERVES: Unearned premium
reserves on property-casualty products are calculated on the pro rata method.

COMMISSION AND OTHER SALES INCOME RECOGNITION AND UNEARNED COMMISSIONS:
Commissions and other sales revenues are recorded as income on a cash basis.
Unearned commissions are estimated for that portion of the commission revenue
that is due to premium finance and other producer entities and recorded as a
liability and a reduction of commission and other sales income.

INSURANCE CLAIMS: The liabilities for insurance claims are determined using
statistical analyses and represent estimates of the ultimate net cost of all
reported and unreported claims that are unpaid at year end. Considerable
variability is inherent in such estimates and actual results will likely differ
from those estimates.


                                       9
<PAGE>   10
               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

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


FEDERAL INCOME TAXES: ACCEL and its subsidiaries file a consolidated federal
income tax return. The provision for income taxes is based on income for
financial reporting purposes, after permanent differences. Deferred tax assets
and liabilities are recognized for the 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
carryforwards. 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.

REINSURANCE: Reinsurance premiums ceded and reinsurance recoveries on losses and
loss adjustment expenses incurred are deducted from the respective income and
expense accounts. Assets and liabilities related to reinsurance ceded are
reported on a gross basis.

DEFERRED REINSURANCE COMMISSIONS: Commissions and ceding fees received in
connection with premiums ceded are deferred and amortized in a manner related to
the recognition of premiums earned. Earned ceding fees, commissions and
experience refunds are reported as reinsurance expense recoveries in the
unaudited consolidated statements of operations.

STOCK OPTION PLANS: Prior to January 1, 1996, the Company accounted for its
stock option plans in accordance with the provisions of Accounting Principles
Board ("APB") Opinion No. 25, Accounting for Stock Issued to Employees, and
related interpretations. As such, compensation expense would be recorded on the
date of grant only if the current market price of the underlying stock exceeded
the exercise price. On January 1, 1996, the Company adopted Statement of
Financial Accounting Standards ("SFAS") No. 123, Accounting for Stock-Based
Compensation, which permits entities to recognize as expense over the vesting
period the fair value of all stock-based awards on the date of grant.
Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants made in 1995 and
future years as if the fair value based method defined in SFAS No. 123 had been
applied. The Company has elected to continue to apply the provisions of APB
Opinion No. 25 and provide the pro forma disclosure provisions of SFAS No. 123.

EARNINGS (LOSS) PER COMMON SHARE: Net income (loss) per common share is computed
using the weighted average number of common shares outstanding during the
period.

RECLASSIFICATIONS:  Certain amounts in the 1999 unaudited consolidated
financial statements have been reclassified to conform with the 2000
presentation.

NOTE B -- REINSURANCE

The ceding of insurance through reinsurance agreements does not discharge the
primary liability of the original underwriter to the insured, but it is the
practice of insurers to treat risks that have been reinsured with other
companies, to the extent of the reinsurance, as though they were not risks for
which the original insurer is liable. Should the reinsurer not be able to meet
its obligations, those obligations are the ultimate responsibility of the
Company. Therefore, in financial statement presentation, premiums earned and
loss and loss adjustment expenses are presented net of that portion of risks
reinsured with other companies.

The Company has entered into reinsurance contracts associated with its property
- casualty business. Under these agreements, the Company transfers a percentage
of risk to the related reinsurer. The Company also has agreements that transfer
risks after a predetermined loss has been reached. Unearned premium reserves
associated with these agreements at March 31, 2000 and December 31, 1999 are
$1.4 million and $1.9 million, respectively, and the liability for insurance
claims ceded under these agreements is $34.0 million and $40.0 million at March
31, 2000 and December 31, 1999, respectively.


                                       10
<PAGE>   11
               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

NOTE B -- REINSURANCE - (CONTINUED)

The following data summarizes certain aspects of the Company's reinsurance
activity for 2000 and 1999:

Premiums written and earned in 2000 and 1999 are summarized as follows:

<TABLE>
<CAPTION>
                        Three Months Ended March 31,
                      2000                         1999
                      ----                         ----
             Written        Earned        Written         Earned
                             (Thousands of dollars)
<S>           <C>          <C>            <C>            <C>
Direct        $  99        $ 1,097        $ 6,848        $ 9,032
Assumed         234            233          1,691          1,894
Ceded          (103)          (235)        (2,768)        (5,053)
              -----        -------        -------        -------
Net           $ 230        $ 1,095        $ 5,771        $ 5,873
              =====        =======        =======        =======
</TABLE>

Loss and loss adjustment expenses incurred in 2000 and 1999 are summarized as
follows:

<TABLE>
<CAPTION>
                                  Three Months Ended March 31,
                                    2000           1999
                                   -------        -------
                                   (Thousands of dollars)
<S>                                <C>            <C>
Direct                             $ 2,220        $ 8,923
Assumed                                 72          1,004
Ceded                               (1,380)        (5,602)
                                   -------        -------
Net loss and loss adjustment
  expenses                         $   912        $ 4,325
                                   =======        =======
</TABLE>


NOTE D--SEGMENT INFORMATION

ACCEL operates primarily in the property-casualty insurance industry within the
United States. Through its January 2000 purchases, the Company is also in the
property-casualty agency business and in the insurance services business
including underwriting management, actuarial support and claims administration.
Except for certain claims handling fees between ANIC and AIM, there are no
intersegment sales. The allocations of certain general expenses and investment
income within segments are based on a number of assumptions, and the reported
operating results would change if different methods were applied. Depreciation
and capital expenditures are not considered material. Information relating to
revenue, loss before income taxes and identifiable assets by segment are
summarized as follows:


<TABLE>
<CAPTION>
                                    Three Months Ended March 31,
                                        2000           1999
                                       -------        -------
                                       (Thousands of dollars)
<S>                                    <C>            <C>
Revenue:
     Property-Casualty Insurance       $ 1,146        $ 6,341
     Insurance Agencies                  2,265             --
     Insurance Services                    669             --
     Corporate                              --              4
                                       -------        -------
       Total                           $ 4,080        $ 6,345
                                       =======        =======
Loss before income taxes:
     Property-Casualty Insurance       $  (718)       $  (938)
     Insurance Agencies                   (143)            --
     Insurance Services                    117             --
     Corporate                             (69)          (321)
                                       -------        -------
       Total                           $  (813)       $(1,259)
                                       =======        =======
</TABLE>


<TABLE>
<CAPTION>
                              March 31,     December 31,
                                2000          1999
                              -------        -------
                             (Thousands of dollars)
<S>                           <C>           <C>
Identifiable assets:
     Property/Casualty        $58,202       $72,629
     Insurance Agencies         5,107            --
     Insurance Services         2,808            --
     Corporate                    782           406
                              -------       -------
       Total                  $66,899       $73,035
                              =======       =======
</TABLE>


                                       11
<PAGE>   12
               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

NOTE E--COMMITMENTS AND CONTINGENCIES

Due to the nature of its operations, the Company is at all times subject to
pending and threatened legal actions that arise in the normal course of its
activities. In management's evaluation of certain pending matters, based on the
advice or information and analysis of outside counsel, the accompanying
consolidated financial statements would not be materially affected by the
outcome of any legal proceedings or contingent liabilities.

In July 1991, the Company acquired 100% of RGL. Galaxy Insurance Company
("Galaxy"), a wholly owned subsidiary of RGL, wrote commercial property and
casualty insurance, and assumed treaty reinsurance. Galaxy became statutorily
insolvent at June 30, 1994. Due to the insolvency of Galaxy, the Company wrote
its investment in RGL to zero and deconsolidated RGL as of April 1, 1994.

On October 7, 1994, the Liquidation Bureau took control of Galaxy pursuant to an
order of liquidation of the New York Supreme Court. Prior to the liquidation of
Galaxy, ANIC 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"), 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 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 to ANIC. 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.

In early 1998, the Superintendent of Insurance of the State of New York, as
Liquidator of Galaxy and Administrator of the Guaranty Fund ("Superintendent"),
filed suit against ANIC in New York State Supreme Court. The complaint alleged,
among other things, breach of contract and demanded that ANIC specifically
perform its alleged obligations under the Certificates. The complaint asked for
an amount in excess of $6.5 million in damages.

As reflected above, the suit requested indemnification or reimbursement for the
claims paid or to be paid by the Guaranty Fund to Galaxy insureds on policies
which may have been covered by the Certificates. ANIC has maintained that the
Guaranty Fund does not have the right to seek indemnification unless the terms
and conditions of validly issued Certificates have been strictly complied with.
Accordingly, ANIC filed for dismissal of the suit which motion was granted by
the Court on October 6, 1998. Thereafter, the Superintendent moved to reargue
and renew his opposition to ANIC's motion to dismiss. By an Order dated February
23, 1999, the Court denied the Superintendent's motion. The Superintendent has
filed a Notice of Appeal of the Court's Decision and Order dismissing the
complaint, and has filed a brief in support of the appeal. ANIC will continue to
defend vigorously against the Superintendent's lawsuit.

On October 1, 1999 settlement was reached regarding a November 1997 suit that
was filed against ALIC by three long-term care policyholders seeking to
represent a class of North Dakota policyholders alleging breach of contract,
fraud and misrepresentation. Pursuant to a settlement agreement, ALIC paid $4.0
million toward a global, nationwide settlement. ACCEL, which had conditionally
contracted with Lyndon Life (to whom ALIC was sold), agreed to pay $2.3 million
plus the proceeds from a suit against Lyndon Life that was expected to produce
in excess of $.7 million, previously carried as a receivable. The total
reimbursement to Lyndon was therefore in excess of $3.0 million. Lyndon
maintains that ACCEL owes at least $.7 million additional. ACCEL refuses to pay
on the grounds that it only authorized a total of $3.0 million in accordance
with the sale contract. ACCEL will vigorously oppose making any additional
payments.


                                       12
<PAGE>   13
               ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

       NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


NOTE F -- SUBSEQUENT EVENT

In May 2000, the State of Ohio Department of Insurance (Ohio Department) issued
an Order of Supervision appointing a Supervisor of ANIC under Ohio Revised Code
Section 3903 (A) or (B). ANIC may not dispose of, convey, or encumber any of its
assets, withdraw from bank accounts or lend any of its funds without prior
approval of the Supervisor. There are further limitations on entering into new
contracts or transactions by ANIC without such prior approval. The term of the
Supervision is for 60 days and is automatically renewed until lifted by the Ohio
Department. The action was taken by the Ohio Department pursuant to the
Authorized Control Level Risk Based Capital position of ANIC as of December 31,
1999. Management of the Company believes the Order of Supervision will not have
a material adverse impact on the Company's current operations since ANIC has
essentially written no new business since the summer of 1999. Furthermore, the
Company acknowledges the need for additional capital and is considering various
alternatives, including utilization of the credit facility described in note A,
and other sources of capital.


                                       13
<PAGE>   14
       MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                            RESULTS OF OPERATIONS

     Operating Results for the Three Months Ended March 31, 2000 and 1999


OVERVIEW

ACCEL International Corp. ("ACCEL" or "the Company") is a publicly traded
holding company headquartered in Simsbury, Connecticut. Its principal operating
subsidiaries underwrite property-casualty business, sell non-standard automobile
business, and provide certain services to the property-casualty insurance
marketplace. ACCEL conducts its business through three principal operating
entities. Acceleration National Insurance Company ("ANIC") underwrites U.S.
property-casualty insurance, although ANIC is currently in run-off and is under
supervision of the Ohio Department of Insurance. ANIC is rated B- (Fair) by A.M.
Best Company. Accelerated Agency Group ("AAG") produces non-standard automobile
insurance under the Unistar trade name in Florida. And Allegiance Insurance
Managers ("AIM") provides underwriting, actuarial and claims services to the
property-casualty insurance marketplace.

ACQUISITIONS

On January 14, 2000, the Company acquired 100% of the stock of Allegiance
Insurance Managers. AIM operates as an underwriting manager, managing general
agency, and claims administrator for various programs, companies and clients. It
will continue to expand its operations in these areas. ANIC has placed all of
its underperforming products in run-off. Going forward, the primary focus of
ACCEL and ANIC will be the non-standard automobile line of business.

Also on January 14, 2000, ACCEL completed arrangements for a credit facility of
$5,000,000. Terms of the facility are 10% interest payable quarterly, plus
280,000 warrants per $1,000,000 borrowed, at a price of $2.00 per share. All
monies owed under the facility will be due in full by December 31, 2003.
Applicable warrants will expire on December 31, 2004.

On January 19, 2000 ACCEL acquired the assets of Payless Insurance Agencies
("Payless"). Payless is comprised of two locations in the Fort
Lauderdale/Broward County area, specializing in non-standard automobile
insurance. On January 20, 2000 ACCEL acquired substantially all of the assets of
Unistar Florida Holdings, Inc. ("Unistar"), representing 49 agency locations
throughout the state of Florida, also specializing in non-standard automobile
insurance. ACCEL paid approximately $4,500,000 for all agencies acquired. As of
March 31, 2000, $2.0 million of the credit facility had been drawn down for the
purchase by AAG of the Florida agencies.


CONSOLIDATED RESULTS OF OPERATIONS
QUARTER ENDED MARCH 31, 2000 COMPARED WITH QUARTER ENDED MARCH 31, 1999

The Company announced on July 2, 1999 it would cease writing or renewing its
current lines of commercial property-casualty business due to its loss
experience from 1998 and 1999. Management is pursuing efforts to restructure the
Company so that it can re-enter other areas of the insurance market.

REVENUES
Total revenues for the quarter ended March 31, 2000 decreased 37% to $4.1
million, compared to $6.3 million for the comparable period in 1999. Included in
ACCEL's consolidated results of operations for 2000 are AAG's and AIM's
operating results.

NET PREMIUMS EARNED
Net premiums earned for the three months ended March 31, 2000 were $1.1 million,
compared to $5.9 million in 1999, an 81% decrease. This decrease reflects the
decrease in gross premium writings for the first quarter of 2000 to $0.3 million
compared to $8.5 million for 1999. The Company is in run-off and is refocusing
its operations to enter the non-standard automobile insurance markets. The
decrease in 2000 compared to 1999 was due to the Company's announcement and
subsequent management of its run-off property-casualty activity.

NET INVESTMENT INCOME
ACCEL's net investment income was $291,000 in the first quarter of 2000,
compared to $475,000 in 1999. The overall decrease in investment income in the
first quarter of 2000 is due to run-off property-casualty loss and loss
adjustment expense payments that have decreased the invested asset base, and the
fact that ANIC is not currently writing any new or renewal property-casualty
business.

NET REALIZED INVESTMENT (LOSSES) GAINS
ACCEL realized net investment losses of $239,000 or $(.03) per basic and diluted
share for the quarter ended March 31, 2000, compared to realized net investment
gains of $1,000 (no cents per basic and diluted share) for the same period in
1999. After-tax realized investment losses resulted primarily from the sale of
securities in the quarter to fund loss and loss adjustment expense payments. Due
to the significant amount of available net operating loss carryforwards, the tax
benefits normally associated with these losses can not be recorded.


                                       14
<PAGE>   15
SERVICE FEE, COMMISSION AND OTHER INCOME
For the quarters ended March 31, 2000 and 1999, service fee, commission, and
other income was $2.9 million and $18,000, respectively. Service fee revenue was
$623,000 in the first quarter of 2000. This increase reflects the inclusion of
AIM's business in 2000. Commission revenue from AAG's operations was $2.3
million in the first quarter of 2000.

LOSS AND LOSS ADJUSTMENT EXPENSES INCURRED
ACCEL's loss and loss adjustment expenses incurred was $.9 million for the
quarter ended March 31, 2000, a 79% decrease compared to $4.3 million for the
comparable period in 1999. The decrease is principally attributable to the
decrease in premium volume because of the Company's run-off property-casualty
business.

POLICY ACQUISITION COSTS
ACCEL's deferred policy acquisition costs were $221,000 for the quarter ended
March 31, 2000, compared to deferred policy acquisition costs of $399,000 for
the first quarter 1999. The decrease in the expense of $178,000 recognized in
the first quarter 2000 compared to the same time period last year, is
principally attributable to the decrease in premium volume because of the
Company's run-off property-casualty business. Remaining policy acquisition costs
are $59,000 and should run-off in the second quarter.

UNDERWRITING EXPENSES
In the first quarter of 2000, ANIC recorded underwriting expenses of $0.7
million compared to $2.9 million in the same period in 1999. Underwriting
expenses consist of commissions, general and administrative, and taxes licenses
and fees, offset by reinsurance expense recoveries. The decrease in the expense
of $2.2 million recognized in the first quarter 2000 compared to the same time
period last year, is principally attributable to the decrease in premium volume
because of the Company's run-off property-casualty business. The remainder of
the Company's general and administrative expense was attributable to AAG $2.3
million and to AIM $0.6 million.

INTANGIBLE AMORTIZATION
Intangible amortization, which includes amortization of goodwill and other
intangibles, were $116,000 for the quarter ended March 31, 2000. This increase
reflects the inclusion through purchase of AAG's and AIM's businesses in 2000.

INTEREST EXPENSE
Interest expense was $79,000 for the quarter ended March 31, 2000. This increase
reflects the interest on notes payable used to finance the purchase of AAG's and
AIM's businesses in 2000.

LOSS BEFORE INCOME TAXES
ACCEL generated a net loss before income taxes of $.9 million compared for the
three months ended March 31, 2000 compared to a net loss of $1.3 million for the
same period in 1999. The lesser loss occurred for the reasons described above.

INCOME TAX BENEFIT
Income tax benefit for the quarter ended March 31, 2000 was $172,000 compared
with no benefit for the same period in 1999. ACCEL recorded an income tax
benefit for the release of current taxes previously recorded and remaining on
the December 31, 1999 balance sheet. There is co current federal income tax
liability because of NOL carryforwards available to the company.

NET LOSS
ACCEL generated a net loss of $641,000 for the quarter ended March 31, 2000
compared with a net loss of $1.3 million for the comparable period in 1999. The
basic and diluted net loss per share was a loss of $(.07) for the quarter ended
March 31, 2000 as compared to basic and diluted net loss per share of $(.15) for
the same period in 1999.

LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flows from operations have generally been adequate for its
current operating needs. However, The Company has had to be a net-seller of its
fixed income portfolio during the first quarter 2000 in order to provide cash
for current operations. Net sales from the Company's fixed maturity available
for sale portfolio resulted in $6.8 million during the first quarter 2000.

The Company's "available for sale" fixed maturity securities at March 31, 2000
and December 31, 1999 included collateralized mortgage obligation securities and
asset-backed collateralized securities. The mortgage and asset-backed securities
are subject to risks associated with variable prepayments. As such, those
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 have either a planned amortization or
sequential pay classes. The collateralized mortgage obligations and asset backed
securities owned have primarily short to intermediate average lives. At March
31, 2000 the Company did not have a significant amount of higher risk mortgage
or asset backed securities that had a significant risk of loss or principal.
There are negligible default risks on the mortgage and asset backed security
portfolios as a whole as the


                                       15
<PAGE>   16
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. The Company's
collateralized mortgage obligations and asset backed securities are
predominantly sequential pay with little or no exposure to interest only
obligations ("IOs") or inverse IOs.

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 Ohio Department of Insurance ("Ohio Department"). Based on this regulation,
ANIC would require Ohio Department approval to pay any dividend to ACCEL during
2000.

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 management believes that the current
level of policy reserves will be adequate to cover anticipated claim
liabilities. Accordingly, the ultimate amounts required for settlement of policy
benefits may vary significantly from the amounts included in the accompanying
unaudited consolidated financial statements.

Due to the nature of its operations, the Company is at all times subject to
pending and threatened legal actions that arise in the normal course of its
activities. For information regarding legal proceedings involving the Company
including developments relating to the insolvency of Galaxy Insurance Company (a
subsidiary of the Company) and a suit against ALIC by three long-term care
policyholders, see "Note E" in the Notes to Unaudited Consolidated Financial
Statements.

The National Association of Insurance Commissioners ("NAIC") has completed and
adopted a project to codify statutory accounting principles with a provision for
commissioner discretion in the determination of appropriate statutory accounting
for insurers. Although the NAIC has indicated that January 1, 2001 is the
expected date of implementation, the implementation is ultimately dependent upon
the insurer's state of domicile.

SAFE HARBOR DISCLOSURE
In connection with the "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995, ACCEL sets forth below cautionary statements
identifying important risks and uncertainties that could cause its actual
results to differ materially from those that might be projected, forecasted or
estimated in its "forward-looking statements" within the meaning of Section 27A
of the securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934, made by or on behalf of ACCEL in this Quarterly Report on Form 10-Q and in
press releases, written statements or documents filed with the Securities and
Exchange Commission, or in its communications and discussions with investors and
analysts in the normal course of business through meetings, phone calls and
conference calls. Such statements may include, but are not limited to,
projections of premium revenue, investment income, other revenue, losses,
expenses, earnings (including earnings per share), cash flows, plans for future
operations, common stockholders' equity (including book value per share),
investments, financing needs, capital plans, dividends, plans related to
products or services of ACCEL and estimates concerning the effects of litigation
or other disputes, as well as assumptions for any of the foregoing and generally
expressed with the words such as "believes," "estimates," "expects,"
"anticipates," "plans," "projects," "forecasts," "goals," "could have'" "may
have," and similar expressions. ACCEL, as a matter of policy, does not make any
specific projections as to future earnings nor does it endorse any projections
regarding future performance that may be made by others.

Forward-looking statements involve known and unknown risks and uncertainties,
which may cause ACCEL's results to differ materially from such forward-looking
statements. These risks and uncertainties include, but are not limited to, the
following:

-        Changes in the level of competition in the domestic primary insurance
         market that effect the volume or profitability of ACCEL's
         property-casualty business. These changes include, but are not limited
         to, changes in the intensity of price competition, the entry of new
         competitors, existing competitors exiting the market and the
         development of new products by new and existing competitors;

-        Changes in the demand for reinsurance, including changes in ceding
         companies' risk retentions that effect the cost of ACCEL's reinsurance
         purchases;

-        The ability of ACCEL to execute its strategies in its
         property-casualty, agency and service operations;

-        Adverse development on property-casualty loss and loss adjustment
         expense liabilities related to business written in prior years,
         including, but not limited to, evolving case law, changing government
         regulations, newly reported claims, new theories of liability or new
         insurance and reinsurance contract interpretations;

-        Lower than expected reinsurance recoveries on unpaid losses, including,
         but not limited to, losses due to a decline in the creditworthiness of
         ACCEL's reinsurers;

-        Increases in interest rates, which may cause a reduction in the market
         value of ACCEL's fixed income portfolio, and its common stockholders'
         equity;

-        Decreases in interest rates which may cause a reduction of income
         earned on new cash flow from operations and the reinvestment of the
         proceeds from sales or maturities of existing investments;

-        Changes in the composition of ACCEL's investment portfolio;

-        Adverse results in litigation matters;


                                       16
<PAGE>   17
-        The impact of mergers and acquisitions; and

-        Changes in ACCEL's capital needs.


In addition to the factors outlined above that are directly related to ACCEL's
businesses, ACCEL is also subject to general business risks, including, but not
limited to, adverse state or federal legislation and regulation, adverse
publicity or news coverage, changes in general economic factors and the loss of
key employees.

The factors set forth above should be considered in connection with any
forward-looking statement contained in this Quarterly Report. The important
factors that could effect such forward-looking statements are subject to change,
and ACCEL does not intend to update any forward-looking statement or the
foregoing list of important factors. By this cautionary note ACCEL intends to
avail itself of the safe harbor from liability with respect of forward-looking
statements provided by Section 27A and Section 21E referred to above.


                                       17
<PAGE>   18
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

MARKET RISK MANAGEMENT

The Company is exposed to market risk, including changes in interest rates. To
manage the volatility relating to this exposure, the Company manages the
duration of its invested assets to stay within a reasonable range of the
duration of its liabilities. The Company does not hold or issue derivative
instruments. The table below provides information about the Company's other
financial instruments that are sensitive to changes in interest rates. The
financial instruments are grouped by market risk exposure category. All
instruments are denominated in U.S. dollars.

Significant interest rate risk sensitive instruments as of March 31, 2000 were:
<TABLE>
<CAPTION>
                                                                                                                            TOTAL
                                                                                                                             FAIR
                                   2000         2001         2002         2003         2004    Thereafter     TOTAL         VALUE
                                  ------       ------       ------       ------       ------   ----------     ------        ------
                                                          (Millions of dollars)
<S>                               <C>          <C>          <C>          <C>          <C>      <C>            <C>           <C>
INVESTMENTS IN FIXED MATURITY SECURITIES

Principal Amount                  $ 0.82       $ 2.33       $ 5.76       $ 1.55          --      $ 3.69       $14.15        $13.86
Book Value                          0.82         2.35         5.83         1.55          --        3.74        14.29
Average Interest Rate               6.04%        6.20%        6.04%        6.15%         --        6.90%        6.31%         7.28%

SHORT-TERM INVESTMENTS

Principal Amount                  $ 1.73           --           --           --          --          --       $ 1.73        $ 1.73
Book Value                          1.73           --           --           --          --          --         1.73
Average Interest Rate               5.81%          --           --           --          --          --         5.81%         5.81%
</TABLE>


                                       18
<PAGE>   19
PART II.  OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K

(a)   Exhibits

     27.0 Financial Data Schedule

(b)   Reports on Form 8-K

           The following report on Form 8-K was filed during the quarter ended
March 31, 2000:


         Date of Report         Item Reported
         --------------         -------------

         February 4, 2000       The Asset Purchase Agreement of Unistar
                                Florida Holdings, Inc. dated January 20,
                                2000, by and among Accelerated Agency Group,
                                Inc., Unistar Florida Holdings, Inc., and
                                Unistar Financial Service Corp.



<PAGE>   20
                              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.


                                 ACCEL INTERNATIONAL CORPORATION
                                 (Registrant)






DATED:  May 22, 2000              BY: /s/ Richard A. Lawrence
        ------------                  --------------------------------
                                      Richard A. Lawrence
                                      * Vice President, Chief Financial Officer
                                      and Treasurer


* Has been duly authorized to execute the report on behalf of the Registrant.


                                       20