<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 SEPTEMBER 30, 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)

                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)

                                  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 October 31, 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

                               SEPTEMBER 30, 2000

                                      INDEX

<TABLE>
<CAPTION>
PART I -- FINANCIAL INFORMATION

         Item 1.  Financial Statements                                                                         Page
                                                                                                               ----
<S>                                                                                                         <C>
                  Consolidated Balance Sheets
                      September 30, 2000 (unaudited) and December 31, 1999                                    3 - 4

                  Consolidated Statements of Operations
                      Three months and nine months ended September 30, 2000 (unaudited) and 1999                  5

                  Consolidated Statements of Common Stockholders' Equity
                      Three months and nine months ended September 30, 2000 (unaudited)
                      and year ended December 31, 1999                                                            6

                  Consolidated Statements of Cash Flows
                      Nine months ended September 30, 2000 (unaudited) and 1999                                   7

                  Notes to Unaudited Consolidated Financial Statements                                       8 - 14

         Item 2.  Management's Discussion and Analysis of Financial
                      Condition and Results of Operations                                                   15 - 18

         Item 3.  Quantitative and Qualitative Disclosures About Market Risk                                     19


PART II -- OTHER INFORMATION

         Item 4.  Submission of Matters to a Vote of Common Security Holders                                     20

         Item 14 (c) -- Exhibits:

         Exhibit 3.    Articles of Incorporation and By-Laws:
                       3.8 Amendments to Article I and Article IX of the Registrant's Bylaws as passed
                       by shareholders on September 7, 2000. (Incorporated by reference to Exhibit B to
                       the Company's definitive Proxy Statement for the 2000 annual meeting of
                       stockholders of the Company.)

         Exhibit 10.   Material Contracts:
                       10.11 Amendment to the Company's 1996 Stock Incentive Plan as passed by
                       shareholders on September 7, 2000. (Incorporated by reference to Exhibit B to the
                       Company's definitive Proxy Statement for the 2000 annual meeting of stockholders
                       of the Company.)

         Signature                                                                                               21

         Exhibit 27.1  Financial Data Schedule
</TABLE>




                                       2
<PAGE>   3
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                         September 30,         December 31,
                                                             2000                  1999
                                                             ----                  ----
                                                          (Unaudited)
ASSETS                                                         (Thousands of dollars)


<S>                                                      <C>                   <C>
Cash                                                        $  276                $  252
Receivables:
     Receivable from premium finance company                   924                    --
     Other accounts receivable                                 777                    --
                                                            ------                ------
                                                             1,977                   252

Equipment--at cost, less accumulated
     depreciation (2000--$765,551; 1999--$0)                   483                    --
Goodwill and intangible assets                               6,006                    --
Other assets                                                   107                   179
Net Assets of Discontinued Operations                          588                 4,744
                                                            ------                ------
                                                             7,184                 4,923
                                                            ------                ------



Total assets                                                $9,161                $5,175
                                                            ======                ======
</TABLE>

                                                                     (Continued)




See notes to unaudited consolidated financial statements




                                       3
<PAGE>   4
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                   CONSOLIDATED BALANCE SHEETS -- (CONTINUED)


<TABLE>
<CAPTION>
                                                             September 30,               December 31,
                                                                 2000                        1999

                                                              (Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY                         (Thousands of dollars, except share data)


<S>                                                          <C>                         <C>
Notes payable                                                  $  7,173                    $     --
Unearned commissions                                                298                          --
Acquisition liability                                               769                          --
Accounts payable                                                  1,076                         114
Other liabilities                                                   357                          --
Current federal income taxes                                         --                         172
                                                               --------                    --------
                                                                  9,674                         286



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--9,997,234; 1999--9,468,196)           1,000                         947
    Additional paid-in capital                                   33,577                      32,659
    Accumulated deficit                                         (28,128)                    (21,178)
    Less treasury shares at cost (2000 and 1999--913,230)        (6,961)                     (6,961)
    Net unrealized available for sale                                --                        (578)
                                                               --------                    --------
                      Net stockholders' equity (deficit)           (512)                      4,889
                                                               --------                    --------


    Total liabilities & stockholders' equity                   $  9,161                    $  5,175
                                                               ========                    ========
</TABLE>




See notes to unaudited consolidated financial statements.




                                       4
<PAGE>   5
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS


<TABLE>
<CAPTION>
                                                             Three Months Ended September 30,    Nine Months Ended September 30,
                                                                 2000              1999              2000              1999
                                                                 ----              ----              ----              ----
                                                                       (Thousands of dollars, except per share data)
<S>                                                          <C>                <C>              <C>                <C>
REVENUE:
     Net investment income:
         Interest and dividends                                         1                 1                 3                15
         Net realized capital gains                                    --               252                --               252
     Equity in gain affiliated company                                 --                65                --                --
     Service fee revenue                                             (348)               --               521                --
     Commission revenue                                             2,710                --             7,866                --
     Other income                                                     314               344               309               287
                                                              -----------       -----------       -----------       -----------
                                                                    2,678               662             8,699               554
                                                              -----------       -----------       -----------       -----------
EXPENSES:

     Commissions and other sales expense                            1,036                 3             3,264                 3
     General and administrative                                     2,612             3,754             7,530             4,512
     Amortization                                                     120                --               369                --
     Interest                                                         129                --               319                --
                                                              -----------       -----------       -----------       -----------
                                                                    3,896             3,757            11,482             4,515
                                                              -----------       -----------       -----------       -----------
LOSS BEFORE FEDERAL INCOME TAXES
AND DISCONTINUED OPERATIONS                                        (1,218)           (3,095)           (2,783)           (3,961)

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

LOSS FROM CONTINUING OPERATIONS                                    (1,218)           (3,095)           (2,611)           (3,961)

Discontinued operations--Note D
     Loss from operations of discontinued business            $    (2,257)           (1,194)      $    (4,170)      $    (6,491)
     Loss on disposal of business segment, including
         provision for operating loss of $510,616 during
         phase-out period                                            (168)               --              (168)                0

                                                              -----------       -----------       -----------       -----------
NET LOSS                                                      $    (3,643)      $    (4,289)      $    (6,949)      $   (10,452)
                                                              ===========       ===========       ===========       ===========

Earnings per common share--basic & diluted:
Loss from continuing operations                               $     (0.13)      $     (0.36)      $     (0.29)      $     (0.46)
Loss from discontinued operations                                   (0.25)            (0.14)            (0.46)            (0.76)
Loss on disposal of business segment                                (0.02)               --             (0.02)               --
                                                              -----------       -----------       -----------       -----------
Net loss per common share--basic & diluted                    $     (0.40)      $     (0.50)      $     (0.77)      $     (1.22)
                                                              ===========       ===========       ===========       ===========

Weighted average number of common
     shares outstanding                                         9,084,004         8,554,966         9,057,071         8,554,966
                                                              ===========       ===========       ===========       ===========
</TABLE>



See notes to unaudited consolidated financial statements.




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

                             (Thousands of dollars)

<TABLE>
<CAPTION>
                                                                                                          Accumulated
                                                                                           Common stock      other
                                                  Common      Additional    Accumulated      held in     comprehensive
                                                  stock    paid-in capital    deficit        treasury        loss            Net
                                                 --------  ---------------  -----------    ------------  -------------    ---------
<S>                                              <C>       <C>              <C>            <C>           <C>              <C>
Balances at December 31, 1998                    $    947     $ 32,659       $ (3,933)      $ (6,961)      $    390       $ 23,102
     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)      $ (6,961)      $   (580)      $  4,887

     Comprehensive loss:
         Net loss                                      --           --         (6,950)            --             --         (6,950)
         Other comprehensive income-
           change in net unrealized losses
           on investment securities                    --           --             --             --            580            580
                                                 --------     --------       --------       --------       --------       --------
         Comprehensive loss                            --           --         (6,950)            --            580         (6,370)
     Issuance of 529,040 shares of
         Common Stock for Allegiance
         Insurance Managers purchase                   53          530             --             --             --            583
     Issuance of 1,243,200 warrants for
         Common Stock in conjunction with
         Notes Payable to Accel Finance Co.            --          388             --             --             --            388
                                                 --------     --------       --------       --------       --------       --------
Balances at September 30, 2000 (Unaudited)       $  1,000     $ 33,577       $(28,128)      $ (6,961)      $     --       $   (512)
                                                 ========     ========       ========       ========       ========       ========
</TABLE>




See notes to unaudited consolidated financial statements.




                                       6
<PAGE>   7
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                 UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                         Nine Months Ended September 30,
                                                                              2000           1999
                                                                            --------       --------
                                                                             (Thousands of dollars)
<S>                                                                      <C>               <C>
OPERATING ACTIVITIES:
     Loss from continuing operations                                        $ (2,611)      $ (3,961)
     Loss from discontinued operations                                        (4,170)      $ (6,491)
     Adjustments to reconcile income (loss) from continuing operations
         to net cash used in by operating activities:
             Change in other assets, other liabilities
                and accrued income taxes                                        (115)        (1,891)
             Provision for depreciation and amortization                         766             --
             Change in net value of discontinued operations                   (8,376)         9,076
             Net realized losses on investments                                   --             --
                                                                            --------       --------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES                          (14,980)        (3,267)

INVESTING ACTIVITIES:
     Equity method investment, net                                                --          4,747
     Investing activities of discontinued operations                          12,546         (2,585)
     Purchases of subsidiaries                                                (6,006)            --
                                                                            --------       --------
NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES                            6,540          2,162
                                                                            --------       --------

FINANCING ACTIVITIES:
     Issuance of notes payable                                                 7,173             --
     Change in accrual of payable related to acquisitions                        769             --
     Warrants Issued                                                             385             --
     Repayment of notes payable                                                  137             --
                                                                            --------       --------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES                            8,464             --
                                                                            --------       --------

NET INCREASE (DECREASE) IN CASH                                                   24         (1,105)
Cash at beginning of year                                                        252          1,174
                                                                            --------       --------
CASH AT END OF PERIOD                                                       $    276       $     69
                                                                            ========       ========
</TABLE>




See notes to unaudited consolidated financial statements.




                                       7
<PAGE>   8
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                               SEPTEMBER 30, 2000


NOTE A--SIGNIFICANT ACCOUNTING POLICIES

CONTINUING OPERATIONS:

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. Beginning with the September 30,
2000 financial statements, ACCEL's property and casualty subsidiary,
Acceleration National Insurance Company (ANIC), is shown as discontinued
operations, and ANIC is no longer fully consolidated. All previous year's
statements have been adjusted to be comparable.

DESCRIPTION OF BUSINESS: ACCEL is an insurance services holding company
incorporated in Delaware. Through its January 2000 purchases of Allegiance
Insurance Managers (AIM) and Accelerated Agency Group (AAG), ACCEL operates in
the non-standard auto insurance agency business, and provides various property
and casualty insurance services including underwriting management, actuarial
support and claims administration.

Formerly, 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, until mid-1999,
on commercial automobile business. Before ANIC announced, on July 2, 1999, its
comprehensive exit from its then 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. Management is pursuing efforts to sell ANIC and the financial
statements reflect ANIC as discontinued operations.

ANIC is 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 Department"), the
domiciliary regulator of ANIC, began an examination of the financial affairs of
ANIC for the years 1998 and 1999. On May 4, 2000, ANIC received an order of
supervision from the Department (see Note G). Because of ANIC's Risk Based
Capital position at December 31, 1999, the Department requested the Company to
file a "as-is" RBC Plan by April 18, 2000, and a RBC Plan including an
additional capital assumption by May 15, 2000. The Company complied with both of
the Department's requests by the due dates. As of the filing date of this Form
10-Q, the Department has neither accepted nor denied the Company's filings. On
September 29, 2000, the Department completed its on-site financial examination,
and gave management the preliminary results of such review. The financial
results for the third quarter and year-to-date 2000, include all accounting
entries known to management as of the last day of the Department's on-site field
examination. The Company is currently attempting to find a buyer for ANIC. If
the Company fails to secure a buyer for ANIC during the fourth quarter of 2000,
management expects that the Department will ask the Company to consent to an
order of rehabilitation.

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 June 30, 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.


                                       8
<PAGE>   9
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


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

AIM operates as an underwriting manager, managing general agency, and claims
administrator for various programs, companies and clients. It plans to continue
to expand its operations in these areas. ANIC is in run-off and ACCEL is seeking
a sale of the company. Going forward, the primary focus of ACCEL 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 from a related party. Terms of the facility are 10% interest payable
quarterly, plus 280,000 warrants per $1,000,000 borrowed. The warrants can be
exercised 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 September 30, 2000, $4.4 million of the facility has been drawn
down and used for either agency purchases or working capital, resulting in the
issuance of 1,243,200 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 was 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. On May 21, 2000, ACCEL acquired the assets of Capitol Insurance
Agency & Tax Service, Inc. ("Capitol"). Capitol is comprised of one location in
West Palm Beach, FL, also specializing in non-standard automobile insurance. For
all agencies acquired, ACCEL paid approximately $4,975,000 in cash and notes.
All agency asset acquisitions were accounted for utilizing purchase accounting
and resulted in the recording of intangible assets of approximately $4,692,000.
As of September 30, 2000, the original 52 locations have been consolidated into
38 locations for both efficiency of operations and expense management
considerations. No decrease in commission revenue is expected from the
consolidation.

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 discontinued operations.

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 include goodwill and other intangible
assets associated with purchase transactions, and are amortized over their
respective lives, on a straight line basis, up to ten years.

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.

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.

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.


                                       9
<PAGE>   10
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

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

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.

DISCONTINUED OPERATIONS:

INVESTMENTS: ANIC 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 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.

ANIC has been liquidating its fixed income portfolio during the first nine
months of 2000. The net sale of securities reduced the Company's fixed maturity
available for sale portfolio by $12.3 million for the nine months ended
September 30, 2000. At September 30, 2000, the available for sale fixed income
portfolio is $8.7 million. However, $5.6 million of this is on deposit with
various state regulators and is generally unavailable to fund the operations of
ANIC.

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.
At September 30, 2000 ANIC carries no asset for deferred policy acquisition
costs.

PREMIUM INCOME RECOGNITION AND UNEARNED PREMIUM RESERVES: Unearned premium
reserves on property-casualty products are calculated on the pro rata method. At
September 30, 2000 ANIC carries only $11,000 in unearned premium reserves.

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.

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.


CONTINUING OPERATIONS:

NOTE B -- SEGMENT INFORMATION

Through its January 2000 purchases, the Company operates in the
property-casualty agency business and in the property-casualty insurance
services business including underwriting management, actuarial consulting 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.


                                       10
<PAGE>   11
                INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

NOTE B -- SEGMENT INFORMATION (CONTINUED)

Information relating to revenue, loss before income taxes and identifiable
assets by segment are summarized as follows:

<TABLE>
<CAPTION>
                                                  Nine Months Ended            Three Months Ended
                                                    September 30,                  September 30,
                                                 2000           1999            2000          1999
                                                -------        -------        -------        -------
                                                (Thousands of dollars)        (Thousands of dollars)
Revenue:
<S>                                             <C>            <C>            <C>            <C>
      Insurance Agencies                        $ 8,196             --        $ 3,023             --
      Insurance Services                            459             --            (47)            --
      Corporate                                      44        $   554             37        $   662
                                                -------        -------        -------        -------
            Total                               $ 8,699        $   554        $ 3,013        $   662
                                                =======        =======        =======        =======

Income (loss) from continuing operations
    before Federal income tax:
      Insurance Agencies                        $(1,287)            --        $  (565)            --
      Insurance Services                           (959)            --           (471)            --
      Corporate                                    (537)       $(3,961)          (182)       $(3,095)
                                                -------        -------        -------        -------
          Loss from continuing operations       $(2,783)       $(3,961)       $(1,218)       $(3,095)
                                                =======        =======        =======        =======
</TABLE>


<TABLE>
                                      September 30,  December 31,
                                         2000           1999
                                      ------------   -----------
                                        (Thousands of dollars)
Identifiable assets:
<S>                                     <C>          <C>
     Insurance Agencies                 $6,040             --
     Insurance Services                  2,207             --
     Corporate                             326         $  431
     Discontinued Operations, net          588          4,746
                                        ------         ------
       Total                            $9,161         $5,177
                                        ======         ======
</TABLE>


NOTE C -- 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.

The North Dakota-Lyndon Matter:

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.


Discontinued Operations:

NOTE D - DISCONTINUED OPERATIONS

As of September 29, 2000, the Company decided to sell or otherwise dispose of
its property-casualty segment represented by the operations of Acceleration
National Insurance Company (ANIC). The Board and management anticipate that the
disposal should occur during the fourth quarter 2000. As of September 30, 2000,
ANIC has assets of $53.6 million and liabilities of $52.9 million. In the
Company's September 30, 2000 financial statements, an estimated loss of $168,000
on disposal of this business segment has been included. Such amount includes an
estimate of $511,000 of provision for the future operating loss during the
disposal period.


                                       11
<PAGE>   12
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

NOTE E -- 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 ANIC.
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.

ANIC has entered into reinsurance contracts associated with its property -
casualty business. Under these agreements, ANIC transfers a percentage of risk
to the related reinsurer. ANIC also has agreements that transfer risks after a
predetermined loss has been reached. Unearned premium reserves associated with
these agreements at September 30, 2000 and December 31, 1999 are $11,000 and
$1.9 million, respectively, and the liability for insurance claims ceded under
these agreements is $37.2 million and $40.0 million at September 30, 2000 and
December 31, 1999, respectively.

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

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

<TABLE>
<CAPTION>
                                  WRITTEN                                                      EARNED
           -----------------------------------------------------       ------------------------------------------------------
                                                       Period Ended September 30,
              Nine Months Ended            Three Months Ended             Nine Months Ended             Three Months Ended
             2000           1999           2000           1999           2000           1999            2000          1999
           --------       --------       --------       --------       --------       --------        --------       --------
                                                         (Thousands of dollars)
<S>        <C>            <C>            <C>            <C>            <C>            <C>             <C>            <C>
Direct     $  1,589       $ 15,251       $     31       $  3,428       $ 24,413       $ 18,353        $  2,294       $  6,060
Assumed          18          3,895            (40)           490          4,911          3,723             (38)         1,188
Ceded        (1,896)        (4,468)          (142)        (1,297)       (11,832)        (9,734)         (2,405)        (2,098)
           --------       --------       --------       --------       --------       --------        --------       --------
Net        $   (289)      $ 14,678       $   (151)      $  2,621       $ 17,492       $ 12,342        $   (149)      $  5,150
           ========       ========       ========       ========       ========       ========        ========       ========
</TABLE>


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

<TABLE>
<CAPTION>
                     Nine Months Ended                     Three Months Ended
                       September 30,                         September 30,
                  2000               1999               2000               1999
                --------           --------           --------           --------
                                 (Thousands of dollars)
<S>             <C>                <C>                <C>                <C>
Direct          $ 16,889           $ 29,789           $ 12,690           $ 10,901
Assumed              368              3,626                (33)             1,354
Ceded            (14,135)           (16,538)           (10,544)            (6,847)
                --------           --------           --------           --------
Net             $  3,122           $ 16,877           $ (2,133)          $  5,408
                ========           ========           ========           ========
</TABLE>


NOTE F - COMMITMENTS AND CONTINGENCIES, DISCONTINUED OPERATIONS

The "Galaxy" New York Liquidation Bureau Suit:

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.


                                       12
<PAGE>   13
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

NOTE F - COMMITMENTS AND CONTINGENCIES, DISCONTINUED OPERATIONS (CONTINUED)

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. On July 17, 2000, the
Company was notified that the Appellate Court ruled against the dismissal by the
New York State Supreme Court. Subsequently, the Company and the Superintendent
have agreed to suspend any motions in this matter for a period of 45 days.

On September 29, 2000, ACCEL received a settlement offer letter from the
Superintendent. The letter offered to settle the suit by payment of 80% of the
proceeds from a sale of ANIC, or $3.0 million from the proceeds of a sale of
ANIC, whichever is greater. After much deliberation, ACCEL's management and
Board of Directors verbally agreed to the settlement terms offered, without
prejudice. A draft legal document has been prepared and comments by counsel for
the Superintendent have been received. ANIC's counsel revised the settlement
agreement and resubmitted to counsel for the Superintendent, but as of the
filing date of this SEC Form 10-Q, the settlement agreement has neither been
approved nor signed by the Company, the Superintendent, or by the Ohio DOI, and
therefore the settlement is still pending until such time as all legal documents
resolving this matter are properly executed. Should such continuing action
result in particulars that are unacceptable to the Company, ANIC will continue
to defend vigorously against the Superintendent's lawsuit.

NOTE G -- ANIC IN SUPERVISION

In May 2000, the State of Ohio Department of Insurance (the "Ohio DOI") 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
DOI. At the same time, the Ohio DOI began a financial examination of ANIC's
statutory books and records. The action was taken by the Ohio DOI 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 remaining credit facility
described in note A, a possible sale of ANIC, or other investor sources of
capital. In addition to the actions taken by the Ohio DOI, the company has been
notified by ten other states in which it is licensed that it no longer can write
additional business in these states without prior written approval.

As a result of the preliminary financial examination by the Ohio DOI, the
Company has recorded $558,000 of additional expense in the June 30, 2000
financial statements.

On August 4, 2000, A.M. Best Company revised ANIC's "Best Rating" from B- (Fair)
to a rating of E (Under Regulatory Supervision). Management of the Company
believes the change in the A.M. Best rating will not have a material adverse
impact on the Company's current operations since ANIC has written no new
business since the summer of 1999, except for certain 100%-ceded aviation
policies, which, as of September 1, 2000, have also been flat cancelled and
rewritten in another carrier.


                                       13
<PAGE>   14
                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)

NOTE H - SUBSEQUENT EVENT

On November 20, 2000, ACCEL filed Form 8-K Current Report related to the signing
of a "Waiver of Certain Procedural Rights as to Motion for Order of
Rehabilitation" ("the Waiver") by Gerald H. Pastor on behalf of ACCEL's wholly
owned subsidiary, ANIC, in Mr. Pastor's position as President and CEO of the
subsidiary. Such action was taken after the Board of Directors of ANIC passed a
resolution authorizing Mr. Pastor to execute such document.

The Waiver acknowledges that ANIC was fully informed of its rights pursuant to
Ohio Revised Code Section 3903.12, and therefore, ANIC by signing the Waiver,
consented to be placed into rehabilitation by the Ohio Department of Insurance
("the Department"). Ohio is the regulating, domiciliary state for ANIC. ANIC has
been under an Order of Supervision since May 4, 2000, such order having been
issued due to the Superintendent of the Department's reasonable belief that ANIC
was in such financial condition as to render the continuance of its business
hazardous to its policyholders, certificate holders or to the public.

By signing the Waiver, ANIC waives any right to defend against a rehabilitation
order, and that ANIC agrees to take all actions, produce all books, records and
other documents, and to fully cooperate in any manner with the Department
regarding rehabilitation. On November 20, 2000 the Board of Directors of ANIC
signed a resolution consenting to place ANIC into rehabilitation by the State of
Ohio Department of Insurance. The Board also agreed as specified in the Waiver
of Certain Procedural Rights as to Motion of Rehabilitation


                                       14
<PAGE>   15
         MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                              RESULTS OF OPERATIONS

Operating Results for the Three and Nine Months Ended September 30, 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 sell non-standard automobile insurance, and provide certain
services to the property-casualty insurance company marketplace. ACCEL conducts
its business through two principal operating entities. 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 company
marketplace. ACCEL's discontinued operations consist of its former
property-casualty underwriting operations through Acceleration National
Insurance Company ("ANIC"). ANIC is currently in run-off and is under
supervision of the Ohio Department of Insurance.

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.

Also on January 14, 2000, ACCEL completed arrangements for a credit facility of
$5,000,000 from a related party. 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. At September 30,
2000, $4.4 million has been drawn down from the facility and 1,243,200 warrants
have been issued.

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. On May 21, 2000, ACCEL acquired the assets of Capitol Insurance
Agency & Tax Service, Inc. ("Capitol"). Capitol is comprised of one location in
West Palm Beach, FL also specializing in non-standard automobile insurance.
ACCEL paid approximately $4,975,000 in cash and notes for all agencies acquired.
All agency asset acquisitions were accounted for utilizing purchase accounting
and resulted in the recording of intangible assets of approximately $4,692,000.


CONSOLIDATED RESULTS OF OPERATIONS

QUARTER AND NINE MONTHS ENDED SEPTEMBER 30, 2000 COMPARED WITH QUARTER AND NINE
MONTHS ENDED SEPTEMBER 30, 1999

REVENUES

Total revenues for the nine months ended September 30, 2000 were $8.7 million
compared to $554,000 for the same period in 1999. For the quarter ended
September 30, 2000, total revenues were $3.0 million compared to $662,000 for
the same quarter in 1999. The primary cause for the substantial increase in the
year 2000 periods over the 1999 periods, is the inclusion in ACCEL's
consolidated results of operations of the acquisitions of both AAG and AIM.

INTEREST INCOME

ACCEL's net interest income for the nine months ended September 30, 2000 was
$3,000 compared to $15,000 for the same period in 1999. For the quarter ended
September 30, 2000 net investment income was $1,000 compared to $1,000 in 1999.

NET REALIZED CAPITAL GAINS

ACCEL had no net realized capital gains for the nine months ended September 30,
2000 compared to net realized capital gains of $252,000 for the same period in
1999. For the quarter ended September 30, 2000, ACCEL had no net realized
capital gains compared to $252,000 net realized capital gains during the same
quarter in 1999. The primary cause for the substantial decrease in the year 2000
periods from the year 1999 periods, was the sale of USAIG in August of 1999 by
ACCEL, which sale produced the realized capital gains in the third quarter of
1999 as shown in the statement of operations.

SERVICE FEE, COMMISSION AND OTHER INCOME

Service fee, commission, and other income for the nine months ended September
30, 2000 was $8.7 million compared to $287,000 of service fee income for the
comparable period in 1999. For the quarter ended September 30, 2000, service
fee, commission, and other income was $3.0 million compared to $344,000 for the
same quarter in 1999. The cause for the substantial increase in the year 2000
periods over the 1999 periods, is the inclusion in ACCEL's consolidated results
of operations of the acquisitions of both AAG and AIM in the year 2000.


                                       15
<PAGE>   16
COMMISSION AND OTHER SALES EXPENSE

Commission and other sales expense for the nine months ended September 30, 2000
was $3.3 million compared to $3,000 for the comparable period in 1999. For the
quarter ended September 30, 2000 commission and other sales expense was $1.0
million compared to $3,000 for the same quarter in 1999. The primary cause for
the substantial increase in the year 2000 periods over the 1999 periods, is the
inclusion in ACCEL's consolidated results of operations of the acquisitions of
both AAG and AIM in the year 2000.

GENERAL AND ADMINISTRATIVE EXPENSES

General and administrative expenses for the nine months ended September 30, 2000
was $7.5 million compared to $4.5 million in the same period in 1999. For the
quarter ended September 30, 2000, general and administrative expenses were $2.6
million compared to $3.8 million for the same period in 1999. The increase in
the expense of $3.0 million during the first nine months of 2000 is attributable
to inclusion in ACCEL's consolidated results of operations of the acquisitions
of both AAG and AIM in the year 2000. The decrease in the expense of $1.2
million for the third quarter compared to the same time period in 1999, is
principally attributable to a one-time payment of $3.0 million by ACCEL in the
1999 period to settle the North Dakota- Lyndon matter.

INTANGIBLE AMORTIZATION

Intangible amortization, which includes amortization of goodwill and other
intangibles, for the first nine months of 2000 was $369,000, and $120,000 for
the quarter ended September 30, 2000. The increases in both periods reflect the
inclusion, through purchase, of AAG's and AIM's businesses in 2000.

INTEREST EXPENSE

Interest expense for the first nine months of 2000 was $319,000 and $129,000 for
the quarter ended September 30, 2000. The increases for both periods reflect the
interest on notes payable used to finance the purchase of AAG's and AIM's
businesses in 2000.

INCOME TAX BENEFIT

The income tax benefit for the first nine months of 2000 was $172,000, compared
with no income tax benefit for the same time period in 1999. There was no income
tax benefit recorded in the quarters ended September 30th for either year. For
the first nine months of 2000, ACCEL recorded an income tax benefit of $172,000
for the release of current taxes previously recorded and remaining on the
December 31, 1999 balance sheet. There is no current federal income tax
liability due to net operating loss (NOL) carryforwards available to the
consolidated group. The Company has not established a net deferred tax asset
because its history of net operating losses makes realization uncertain.

LOSS FROM CONTINUING OPERATIONS

For the first nine months of 2000, ACCEL generated a loss from continuing
operations of $2.6 million, compared to a loss from continuing operations of
$4.0 million for the same period in 1999. For the quarter ended September 30,
2000, the loss from continuing operations was $1.2 million compared with a loss
from continuing operations of $3.1 million for the comparable period in 1999.
The basic and diluted loss from continuing operations per share was a loss of
$(.29) for the nine months ended September 30, 2000 and $(.13) for the quarter
ended, as compared to basic and diluted loss from continuing operations per
share of $(.46) and $(.36) respectively, for the same periods in 1999.

DISCONTINUED OPERATIONS

Discontinued operations, which includes all of the operations of Acceleration
National Insurance Company, for the nine months ended September 30, 2000,
revealed a loss of $4.2 million compared a loss of $6.5 million for the same
period in 1999. For the quarter ended September 30, 2000, the discontinued
operations loss was $2.3 million compared to a loss of $1.2 million for the same
quarter in 1999. Effective September 1, 2000, ANIC's last remaining active
program, a 100%-ceded small aircraft business, was flat-cancelled with the
return of the unearned premiums, commissions and fees to the primary producer.
Going forward from September 1, 2000, ANIC has no in-force exposure to the
aviation business. Board and management have agreed to a plan of disposal for
this segment and the results of ANIC are therefore displayed as discontinued
operations. It is expected that a sale or other disposal will occur during the
fourth quarter of 2000.

NET LOSS

For the first nine months of 2000, ACCEL generated a net loss of $6.9 million,
compared to a net loss of $10.5 million for the same period in 1999. For the
quarter ended June 30, 2000, the net loss was $3.6 million compared with a net
loss of $4.3 million for the comparable period in 1999. The basic and diluted
net loss per share was a loss of $(.77) for the nine months ended September 30,
2000 and $(.40) for the quarter ended, as compared to basic and diluted net loss
per share of $(1.22) and $(.50) respectively, for the same periods in 1999.


                                       16
<PAGE>   17
LIQUIDITY AND CAPITAL RESOURCES

CONTINUING OPERATIONS:

Currently, ACCEL's assets are less than its outstanding liabilities. During the
fourth quarter of the current calendar year, the Company anticipates the
following: (a) although the Company has been searching for a candidate to
purchase ANIC since early July 2000, management believes that the Ohio
Department of Insurance will ask the Company to submit to place ANIC into
voluntary rehabilitation. While this action alone will neither improve the
Company's liquidity nor capital resources, it will, in fact, stem further losses
from ANIC to the Company, and allow the Company to size its main administrative
staff to the new size of the Company; (b) with regard to the Company's ongoing
operations, the fourth quarter of the current calendar year should improve in
both operating and cash flow results for both of the Company's primary ongoing
subsidiaries, AIM and AAG. The expectation is that at least AIM will be in a
positive cash flow position for the quarter with improvement over the last three
quarters for AAG. However, because of fourth quarter expenses in ACCEL, the
parent holding company, cash flow from continuing operations will still be net
negative; and (c) cash is still available to ACCEL from the estimated fair
market value of its two operating subsidiaries, AIM and AAG. If necessary, the
Company is prepared to market and realize such value in these subsidiaries in an
effort to meet its current obligations.

For the first nine months of 2000, continuing operations has experienced
negative operating cash flow of $6.6 million. Start-up operations of the agency
business of AAG, have consumed cash during the transition period to the
Company's new ownership. The Company used $2.3 million from the credit facility
established January 2000, to support working capital needs. Currently,
management forecasts a negative cash flow from discontinued property & casualty
insurance operations for the fourth quarter 2000. Cash flow from continuing
operations will still be net negative during the fourth quarter from either cash
breakeven (from insurance agency operations), cash positive (from insurance
service operations), or cash negative from the parent company. Neither AIM nor
AAG has reached the point in operations where it can pay any dividends to ACCEL.

DISCONTINUED OPERATIONS:

Since ANIC's insurance operations are in run-off, the Company has been
liquidating its fixed income portfolio during the first nine months of 2000.
These net sales of securities reduced the Company's fixed maturity available for
sale portfolio by $12.3 million for the nine months ended September 30, 2000,
and by $3.5 million during the quarter ended September 30, 2000. At September
30, 2000, the available for sale portfolio is $8.7 million; however $5.6 million
of this is on deposit with various state regulators and is generally unavailable
to fund the operations of ANIC. Therefore, free available for sale securities
are $3.1 million.

The estimates for policy reserves are continually under review and adjusted as
necessary as experience develops or new information becomes known. Such
adjustments caused an increase in ANIC's loss and loss adjustment reserves of
$2.1 million in the third quarter 2000. 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.

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


                                       17
<PAGE>   18
SAFE HARBOR DISCLOSURE (CONTINUED)

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 services 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;

-        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.


                                       18
<PAGE>   19
QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market Risk Management -- Discontinued Operations Only

ANIC is exposed to market risk, including changes in interest rates. To manage
the volatility relating to this exposure, ANIC manages the duration of its
invested assets to stay within a reasonable range of the duration of its
liabilities. ANIC does not hold or issue derivative instruments. The table below
provides information about ANIC'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 September 30, 2000
were:
<TABLE>
<CAPTION>
                                                                                                                    TOTAL
                                                                                                                    FAIR
                                             2000      2001      2002      2003      2004    Thereafter    TOTAL    VALUE
                                             ----      ----      ----      ----      ----    ----------    -----    -----
                                                                         (Millions of dollars)

INVESTMENTS IN FIXED MATURITY SECURITIES

<S>                                          <C>      <C>       <C>       <C>        <C>       <C>         <C>       <C>
Principal Amount                             $1.10    $4.56     $0.35     $0.01      0.00      $2.73       $8.75     $8.84
Book Value (amortized cost)                   1.10     4.60      0.36      0.01      0.00       2.76        8.83
Average Interest Rate                         6.33%    6.18%     5.72%     6.78%     0.00%      7.04%       6.38%     6.87%


SHORT-TERM INVESTMENTS

Principal Amount                             $0.94       --        --        --        --         --       $0.94     $0.94
Book Value                                    0.94       --        --        --        --         --        0.94
Average Interest Rate                         6.46%      --        --        --        --         --        6.46%     6.46%
</TABLE>


                                       19
<PAGE>   20
PART II  -  OTHER INFORMATION


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

    Proposal 1. On September 7, 2000, at the Company's annual meeting, the
stockholders of ACCEL International, Inc. elected the following directors, to
serve until the annual meeting of stockholders in 2001:

<TABLE>
<CAPTION>
Nominee                  Affirmative      Negative           Withheld
-------                  -----------      --------           --------
<S>                      <C>              <C>             <C>
David T. Chase           8,372,292           0               427,465

Raymond H. Deck          8,371,392           0               428,365

Richard Desich           8,376,409           0               423,348

Gregory B. Grusse        8,376,409           0               423,348

Richard A. Lawrence      8,376,409           0               423,348

Gerald H. Pastor         8,375,909           0               423,848

John P. Redding          8,376,409           0               423,348

Thomas J. Renwick        8,376,809           0               422,948

Robert N. Worgaftik      8,376,809           0               422,948
</TABLE>


  Proposal 2.   Amendments to Certificate of Incorporation and Bylaws:

<TABLE>
<S>                                                   <C>
     Number of Common Shares voted  FOR:              7,535,011

     Number of  Common Shares voted AGAINST:            493,794

     Number of Common Shares ABSTAINING:                  3,033
</TABLE>



   Proposal 3.   Amendments to the 1996 Stock Incentive Plan:

<TABLE>
<S>                                                   <C>
      Number of Common Shares voted  FOR:             7,378,061

      Number of  Common Shares voted AGAINST:           616,636

      Number of Common Shares ABSTAINING:                38,141
</TABLE>


ITEM 14 (c) - Exhibits:

     Exhibit 27.1 Financial Data Schedule - see page following Signatures.


                                       20
<PAGE>   21
                                   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:   November 21, 2000
       -------------------------






By:  /s/ Gerald H. Pastor               By:    /s/ Richard A. Lawrence
    ------------------------------            ------------------------------
    Gerald H. Pastor                          Richard A. Lawrence
    *President and Chief Executive           *Senior Vice President, Chief
     Officer                                  Financial Officer and Treasurer


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


                                       21