<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, 1998

[ ]      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.)

12603 S.W. FRWY, STE. 315, STAFFORD, TEXAS                         77477
------------------------------------------                       ---------
(Address of principal executive offices)                         (Zip Code)

                                  281-565-8010
                        ------------------------------
                        (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, 1998, there were 8,557,659 shares of Common Stock, $.10 par
value per share outstanding.



                                        1

<PAGE>   2

                                                     COMMISSION FILE NO. 0-8162
                                                                        -------



                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                                 MARCH 31, 1998

                                      INDEX

PART I -- FINANCIAL INFORMATION
<TABLE>
<CAPTION>
                                                                                     Page
                                                                                     ----
<S>                                                                                 <C>
          Item 1.  Financial Statements

                   Unaudited Consolidated Balance Sheets
                       (March 31, 1998 and December 31, 1997)                        3 -  4

                   Unaudited Consolidated Statements of Operations (Three months
                       ended March 31, 1998 and 1997)                                     5

                   Unaudited Consolidated Statements of Common Stockholders'
                       Equity (Three months ended March 31, 1998 and year
                       ended December 31, 1997)                                           6

                   Unaudited Consolidated Statements of Cash Flows (Three months
                       ended March 31, 1998 and 1997)                                     7

                   Notes to Unaudited Consolidated Financial Statements              8 - 13

          Item 2.  Management's Discussion and Analysis of Financial
                       Condition and Results of Operations                          14 - 16


 PART II -- OTHER INFORMATION

          Item 6.  Exhibits and Reports on Form 8-K                                      17
          Signature                                                                      17
 </TABLE>



                                       2
<PAGE>   3

                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

                      UNAUDITED CONSOLIDATED BALANCE SHEETS


<TABLE>
<CAPTION>
                                                              March 31,        December 31,
                                                                 1998             1997
                                                             ------------     ------------
                                                                 (Thousands of dollars)
<S>                                                         <C>               <C>
 ASSETS

 Investments:
      Investments available for sale, at fair value:
         Fixed maturities (cost: 1998--$27,239,000;
             1997--$21,614,000)                              $     27,415     $     21,789
         Equity securities (cost:  1997--$4,879,000)                   --            4,879
         Short-term investments
             (cost:  1998--$9,694,000; 1997--$7,253,000)            9,694            7,253
      Other invested assets                                         5,000               --
                                                             ------------     ------------
                                                                   42,109           33,921

 Cash                                                               3,654            1,589

 Receivables:
      Premiums in process of transmittal, less
         allowance (1998--$204,000; 1997--$130,000)                10,697           11,633
      Amounts due from reinsurers                                  19,058           16,739
      Amounts due from former subsidiaries                            106            1,201
                                                             ------------     ------------
                                                                   29,861           29,573

 Accrued investment income                                            329              252
 Prepaid reinsurance premiums                                       8,043            9,567
 Deferred policy acquisition costs                                  3,346            3,112
 Equipment--at cost, less accumulated
      depreciation (1998--$329,000;  1997--$273,000)                  564              409
 Leasehold improvements, less accumulated amortization
      (1998--$5,000; 1997--$3,000)                                     33               35
 Receivable from sale of discontinued and disposed
      of operations                                                   556           24,987
 Other assets:
      Reinsurance recoverable                                         731               --
      Other                                                           410              649
                                                             ------------     ------------
                                                                   14,012           39,011
                                                             ------------     ------------
 Total assets                                                $     89,636     $    104,094
                                                             ============     ============
</TABLE>



                                       3
                                                                    (Continued)
<PAGE>   4

                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

               UNAUDITED CONSOLIDATED BALANCE SHEETS--(CONTINUED)

<TABLE>
<CAPTION>
                                                             March 31,       December 31,
                                                               1998               1997
                                                           ------------      ------------
                                                                (Thousands of dollars)
 LIABILITIES AND COMMON STOCKHOLDERS' EQUITY
<S>                                                        <C>              <C>
 Policy Reserves and Liabilities:
    Unearned premium reserves                              $     15,318      $     29,986
    Insurance claims                                             24,862            22,028
                                                           ------------      ------------
                                                                 40,180            52,014
 Other Liabilities:
    Funds held under reinsurance agreements                       2,052             2,076
    Deferred reinsurance commissions                              1,825             1,635
    Amounts due reinsurers                                        3,922             4,563
    Payable for other invested assets acquired                    5,000                --
    Commissions payable                                              --             2,842
    Accounts payable and other liabilities                        3,686             3,097
    Current federal income taxes                                    128             4,278
                                                           ------------      ------------
                                                                 16,613            18,491
                                                           ------------      ------------
                                                                 56,793            70,505
                                                           ------------      ------------

 Commitments and Contingencies -- Note E

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

 Common stockholders' equity:
    Common stock, $.10 par value
        Authorized shares (1998--15,000,000;
              1997--15,000,000)
        Issued shares (1998--9,449,083;
              1997--9,445,183)                                      945               944
    Additional paid-in capital                                   32,618            32,610
    Retained earnings                                             6,069             6,518
    Less treasury shares at cost (1998--891,424;                 (6,905)           (6,599)
        1997--797,420)
    Accumulated other comprehensive income                          116               116
                                                           ------------      ------------
                       Net common stockholders' equity           32,843            33,589
                                                           ------------      ------------

    Total liabilities and common stockholders' equity      $     89,636      $    104,094
                                                           ============      ============
</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 March 31,
                                                                      1998              1997
                                                                  ------------      ------------
                                                         (Thousands of dollars, except per share data)
<S>                                                               <C>              <C>
 REVENUE:
      Gross premiums written                                      $     13,791      $      7,416
      Less reinsurance ceded                                             8,185             2,403
                                                                  ------------      ------------
         Net premiums written                                            5,606             5,013
      Increase in unearned premium reserves                               (723)           (1,198)
                                                                  ------------      ------------
         Premiums earned                                                 4,883             3,815
      Net investment income:
         Interest and dividends                                            664               403
         Realized gains (losses)                                           (53)               64
      Service fees on extended service
         contracts                                                          --               545
      Other income                                                         125                45
                                                                  ------------      ------------
                                                                         5,619             4,872
                                                                  ------------      ------------
 BENEFITS AND EXPENSES:
      Loss and loss adjustment expenses                                  3,869             2,697
      Commissions and selling expenses                                   2,211             1,515
      Reinsurance expense recovery                                      (1,528)             (417)
      General and administrative                                         1,290               990
      Taxes, licenses and fees                                             519               247
      Interest                                                              --               356
      Increase in deferred policy
         acquisition costs                                                (234)             (265)
                                                                  ------------      ------------
                                                                         6,127             5,123
                                                                  ------------      ------------
 INCOME (LOSS) BEFORE FEDERAL INCOME
      TAXES AND DISCONTINUED OPERATIONS                                   (508)             (251)

      Federal income taxes:
         Current expense                                                    --                --
         Deferred expense                                                   --                93
                                                                  ------------      ------------
                                                                            --                93
                                                                  ------------      ------------

 INCOME (LOSS) FROM CONTINUING OPERATIONS                                 (508)             (344)

 Discontinued operations:
        Income from operations of discontinued business
            segment (net of income tax of  ($83,000) in 1997)               --               569

                                                                  ------------      ------------

 NET INCOME (LOSS)                                                $       (508)     $        225
                                                                  ============      ============

 Earnings per common share--basic/assuming dilution:
      Loss from continuing operations                             $      (0.06)     $      (0.04)
      Income from discontinued operations                                   --               .07

                                                                  ------------      ------------
      Net income (loss)                                           $      (0.06)     $       0.03
                                                                  ============      ============

 Weighted average number of common
      shares outstanding                                             8,607,908         8,603,742
                                                                  ============      ============
</TABLE>


See notes to unaudited consolidated financial statements.


                                       5
<PAGE>   6



                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES
        UNAUDITED CONSOLIDATED STATEMENTS OF COMMON STOCKHOLDERS' EQUITY

                             (Thousands of dollars)
<TABLE>
<CAPTION>
                                                     Additional                  Common                 Accumulated other
                                         Common       paid-in     Retained    stock held in               comprehensive
                                          stock       capital     earnings      treasury      ESOP loan      income         Net
                                        --------     --------     --------      ---------     ---------     ---------     --------
<S>                                     <C>          <C>          <C>           <C>           <C>           <C>           <C>     
 Balances at December 31, 1996               940       32,507        5,403        (6,599)          (32)         (578)       31,641
 Comprehensive income:
    Net income                                --           --        1,115            --            --            --         1,115
    Other comprehensive
        income (loss), net:
    Change in net unrealized
        appreciation on
        investment securities                 --           --           --            --            --           694           694
                                        --------     --------     --------      --------      --------      --------      --------
    Other comprehensive
        income                                --           --           --            --            --           694           694
                                        --------     --------     --------      --------      --------      --------      --------
    Comprehensive income                      --           --        1,115            --            --           694         1,809
    Payments on ESOP loan                     --           --           --            --            32            --            32
    Issuance of 44,021 shares of
        Common Stock under
        Common Stock Option Plan               4          103           --            --            --            --           107
                                        --------     --------     --------      --------      --------      --------      --------
 Balances at December 31, 1997               944       32,610        6,518        (6,599)           --           116        33,589
 Comprehensive income (loss):
    Net loss                                  --           --         (508)           --            --            --          (508)
    Other comprehensive
        income (loss), net:
    Change in valuation allowance
        for unrealized appreciation
        on investment securities              --           --           59            --            --            --            59
                                        --------     --------     --------      --------      --------      --------      --------
    Other comprehensive
        income                                --           --           59            --            --            --            59
                                        --------     --------     --------      --------      --------      --------      --------
    Comprehensive income (loss)               --           --         (449)           --            --            --          (449)
    Purchase of 94,004 shares as
        treasury stock                        --           --           --          (306)           --            --          (306)
    Issuance of 3,900 shares of
        Common Stock under
        Common Stock Option Plan               1            8           --            --            --            --             9
                                        --------     --------     --------      --------      --------      --------      --------
    Balances at March 31, 1998               945       32,618        6,069        (6,905)           --           116        32,843
                                        ========     ========     ========      ========      ========      ========      ========
</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,
                                                                                1998            1997
                                                                            -----------      -----------
                                                                               (Thousands of dollars)
<S>                                                                         <C>              <C>         
 OPERATING ACTIVITIES:
      Income (loss) from continuing operations                              $      (508)     $      (344)
      Adjustments to reconcile income (loss) from continuing operations
          to net cash used in operating activities:
             Change in premiums receivable                                          936           (1,207)
             Change in accrued investment income                                    (77)              67
             Change in prepaid reinsurance premiums                               1,524             (472)
             Change in premium deposits held                                        (24)              23
             Change in unearned premium reserves                                (14,668)           1,670
             Change in insurance claim reserves                                   2,834             (182)
             Change in amounts due to and from reinsurers                        (3,691)             (48)
             Change in other assets, other liabilities
                 and accrued income taxes                                          (289)          (1,025)
             Accrual of discount on bonds                                            (7)             (50)
             Amortization of premium on bonds                                        17               26
             Amortization of deferred policy acquisition  costs                   5,957            2,476
             Policy acquisition costs deferred                                   (6,191)          (2,741)
             Reinsurance commissions earned                                      (4,412)          (1,465)
             Reinsurance commissions received                                     4,602            1,619
             Provision for depreciation and amortization                             56               25
             Net realized gains (losses) on investments                             (53)              64
                                                                            -----------      -----------
      Net cash used in continuing operations                                    (13,994)          (1,564)
      Net cash provided by discontinued operations                               39,756            2,007
                                                                            -----------      -----------
 NET CASH PROVIDED BY OPERATING ACTIVITIES                                       25,762              443
                                                                            -----------      -----------

 INVESTING ACTIVITIES:
      Sale of investments available for sale                                      5,641            2,260
      Purchase of investments available for sale                                (13,832)          (2,861)
      Other, net                                                                   (209)             (95)
                                                                            -----------      -----------
 NET CASH USED IN INVESTING ACTIVITIES                                           (8,400)            (696)
                                                                            -----------      -----------

 FINANCING ACTIVITIES:
      Payment of ESOP loan                                                           --               32
      Repayment of notes payable                                                (15,000)              --
      Issuance of common stock under stock option plan                                9               --
      Repurchase of treasury shares                                                (306)              --
                                                                            -----------      -----------
 NET CASH PROVIDED BY FINANCING ACTIVITIES                                      (15,297)              32
                                                                            -----------      -----------
 NET INCREASE (DECREASE) IN CASH                                                  2,065             (221)
 Cash at beginning of year                                                        1,589              415
                                                                            -----------      -----------
 CASH AT END OF YEAR                                                        $     3,654      $       194
                                                                            ===========      ===========
</TABLE>


See notes to unaudited consolidated financial statements.


                                       7
<PAGE>   8


                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

              NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

                                 MARCH 31, 1998


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, 1997.

PRINCIPLES OF CONSOLIDATION: The accompanying unaudited consolidated financial
statements include the accounts of ACCEL and its wholly-owned subsidiaries. As
discussed more fully in Note B, Acceleration Life Insurance Company ("ALIC") and
Dublin International Limited ("Dublin") are presented as discontinued
operations. All significant intercompany accounts and transactions have been
eliminated in the unaudited consolidated financial statements. The Company's
investment in an affiliate owned more than 20 percent, but not in excess of 50
percent, is reported using the equity method.

DESCRIPTION OF BUSINESS: ACCEL is an insurance holding company incorporated in
Delaware. The Company is engaged in the underwriting and sale of
property/casualty insurance products, concentrating on commercial lines of
business. The Company offers 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. The Company offers these products through general agents. The Company
is subject to competition from other insurers throughout the states in which it
writes business. The Company is also subject to regulation by the insurance
departments of states in which it is licensed, and undergoes periodic
examinations by those departments.

In addition to the property and casualty insurance products described above, the
Company has historically sold, principally through automobile dealers, credit
life and credit accident and health insurance and extended service contracts
("Auto Aftermarket Group"). Effective December 31, 1997, the Company sold its
Auto Aftermarket Group as discussed more fully in Note B. As a result of this
transaction, the Company has ceased to be engaged in the auto aftermarket credit
insurance and extended service contract businesses.

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

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

Effective March 31, 1998, the Company purchased a 25% interest in the common
stock of USA Insurance Group, Inc., the parent company of Transportation
Insurance Specialists, the Company's general agent, for $5 million. This
investment is included in other invested assets and is accounted for using the
equity method.

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



                                       8
<PAGE>   9


                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


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

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.

LEASEHOLD IMPROVEMENTS: Leasehold improvements are carried at cost less
accumulated amortization. Amortization is provided using the straight-line
method over the term of the five year lease.

PREMIUM INCOME RECOGNITION AND UNEARNED PREMIUM RESERVES: Unearned premium
reserves on property and casualty products are calculated on the pro rata
method. Unearned premium reserves on the extended service contracts were based
on the historical emergence pattern of claims. The Company's primary liability
on new car contracts existed subsequent to the expiration of manufacturers'
warranties. This method resulted in premium being recognized in direct
proportion to the emergence of benefits on these contracts.

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.

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.



                                       9
<PAGE>   10


                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


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

EARNINGS PER COMMON SHARE: Net income and net loss per common share are computed
using the weighted average number of common shares outstanding during the
period. Effective December 31, 1997, the Company adopted SFAS No. 128, Earnings
per Share. This standard, which did not have an effect on net income,
establishes standards for computing and presenting earnings per share. Earnings
per share for 1997 have been restated to comply with SFAS No. 128.

RECLASSIFICATIONS: Certain amounts in the 1997 unaudited consolidated financial
statements have been reclassified to conform with the 1998 presentation.

NOTE B -- SALE OF AUTO AFTERMARKET GROUP

On October 20, 1997, ACCEL entered into agreements to sell to Lyndon Insurance
Group, Inc. and Lyndon Life Insurance Company (collectively, "Lyndon") the
outstanding capital stock of ALIC, Acceleration National Service Company
("ANSC") and Dublin (collectively, the "Target Corporations") for $30.2 million
in cash and to sell to Lyndon Property Insurance Company ("Lyndon Property")
assets related to the vehicle extended service contract business of ACCEL's
wholly owned subsidiary, Acceleration National Insurance Company ("ANIC"), for
$10.3 million in cash. The sale was effective December 31, 1997.

The agreements provided that within 125 days after the closing, the sales price
for the Target Corporations would be decreased or increased by the amount, if
any, by which the Target Corporations' combined GAAP stockholder's equity as of
December 31, 1997 was less than or greater than, respectively, $31.6 million. As
of December 31, 1997, the combined GAAP stockholder's equity of the Target
Corporations was $32.1 million which resulted in a net sales price of
approximately $41 million.

The "Receivable from sale of discontinued and disposed of operations"
("receivable from sale") of approximately $.5 million as of March 31, 1998
represents the difference between the net sales price of $41 million and the
initial sales price of $40.5 million. The receivable from sale of approximately
$25 million as of December 31, 1997 represents the net sales proceeds of $41
million less the note payable and accrued interest of $16 million transferred to
ALIC by an unaffiliated company on December 31, 1997. The Company has filed a
legal action seeking declaratory judgment relief relating to a disagreement with
Lyndon concerning the exact amount of the net sales price. Accordingly, the
receivable from sale may be more or less than $.5 million. The Company believes
the resolution of the matter will not have a material adverse effect on the
financial condition or results of operations of the Company.

In conjunction with the sale, on January 1, 1998, ANIC ceded via a quota share
reinsurance agreement 100% of its liability related to the vehicle extended
service contract business to Lyndon Property. Upon consummation of the
aforementioned sale, the Company ceased to be engaged in the auto aftermarket
credit insurance and extended service contract businesses. The consolidated
financial statements of the Company have been reclassified to reflect the
disposition of ALIC and Dublin which comprised the Life/Health business segment.
Accordingly, the assets, liabilities, revenues, benefits and expenses, and cash
flows of ALIC and Dublin have been excluded from the respective captions in the
unaudited consolidated balance sheets, unaudited consolidated statements of
operations, and unaudited consolidated statements of cash flows for 1997. The
net operating results of these entities have been reported, net of applicable
income taxes, as "Income from discontinued operations", the assets and
liabilities of these entities have been reported as "Assets of discontinued
operations" and "Liabilities of discontinued operations", and the net cash flows
of these entities have been reported as "Net cash (used in) provided by
discontinued operations." The vehicle extended service contract business sold to
Lyndon Property and ANSC were components of the Company's property and casualty
segment, and therefore are included in continuing operations for 1997.

NOTE C--REINSURANCE

The Company has entered into reinsurance contracts associated with its property
and casualty lines which transfer a percentage of risk to the related reinsurer.
The Company also has agreements which transfer risks after a predetermined loss
amount has been reached. Unearned premium reserves associated with these
agreements at March 31, 1998 and December 31, 1997 are $24.7 million and $9.6
million, respectively, and the liability for insurance claims is $17.3 million
and $14.3 million at March 31, 1998 and December 31, 1997, respectively. As a
result of the sale of the extended service contract business, related assets and
liabilities of the extended service contract business in force as of December
31, 1997 were transferred to Lyndon Property effective January 1, 1998. The
following data summarizes certain aspects of the Company's reinsurance activity
for 1998 and 1997.



                                       10
<PAGE>   11


                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


NOTE C--REINSURANCE--(CONTINUED)

Premiums written and earned in 1998 and 1997 are summarized as follows:

<TABLE>
<CAPTION>
                               Three Months Ended March 31,
                              1998                      1997
                              ----                      ----
                      Written       Earned       Written       Earned
                     --------      --------      -------      -------
                                  (Thousands of dollars)
<S>                  <C>           <C>           <C>          <C>    
 Direct              $ 12,696      $ 10,892      $ 7,416      $ 5,746
 Assumed                1,095           926           --           --
 Ceded                 (8,185)       (6,935)      (2,403)      (1,931)
                     --------      --------      -------      -------
 Net                 $  5,606      $  4,883      $ 5,013      $ 3,815
                     ========      ========      =======      =======
</TABLE>

Loss and loss adjustment expenses incurred in 1998 and 1997 are summarized as
follows:

<TABLE>
<CAPTION>
                                  Three Months Ended March 31,
                                      1998              1997
                                  -----------      -----------
                                    (Thousands of dollars)
<S>                               <C>              <C>        
 Direct                           $     8,472      $     3,632
 Assumed                                  571               --
 Ceded                                 (5,174)            (935)
                                  -----------      -----------
 Net loss and loss adjustment
   expenses                       $     3,869      $     2,697
                                  ===========      ===========
</TABLE>

NOTE D--SEGMENT INFORMATION

The Company operates primarily in the property/casualty insurance industry
within the United States. 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, income (loss) before income taxes and
discontinued operations, and identifiable assets by segment are summarized as
follows:

<TABLE>
<CAPTION>
                                                         Three Months Ended March 31,
                                                            1998              1997
                                                         ------------      ------------
                                                            (Thousands of dollars)
<S>                                                     <C>              <C>        
  Revenue:
          Property/Casualty                             $      5,391      $      4,864
          Corporate and Other                                    228                 8
                                                        ------------      ------------
            Total                                       $      5,619      $      4,872
                                                        ============      ============


 Income (loss) before income taxes and discontinued
  operations:
         Property/Casualty                              $       (505)     $        238
         Corporate and Other                                      (3)             (489)
                                                        ------------      ------------
           Total                                        $       (508)     $       (251)
                                                        ============      ============
</TABLE>

<TABLE>
<CAPTION>
                                                          March 31,      December 31,
                                                            1998              1997
                                                        ------------      ------------
                                                             (Thousands of dollars)
<S>                                                     <C>               <C>
 Identifiable assets:
         Property/Casualty                              $     78,553      $     89,303
         Corporate and Other                                  11,083            14,791
                                                        ------------      ------------
           Total                                        $     89,636      $    104,094
                                                        ============      ============
</TABLE>


Effective January 1, 1998, the Company adopted SFAS No. 131, Disclosures about
Segments of an Enterprise and Related Information. This standard, which does not
have an effect on net income, establishes standards for disclosing segment
information.



                                       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 opinion, based on the advice of outside counsel, the
accompanying consolidated financial statements would not be materially affected
by the ultimate outcome of any legal proceedings or contingent liabilities.

In July 1991, the Company acquired 100% of Randjill Group, Ltd ("RGL"). Galaxy
Insurance Company ("Galaxy"), a wholly owned subsidiary of RGL, wrote commercial
property insurance, property and casualty, 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 of the New York Department of
Insurance ("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.

By complaint dated February 5, 1998, the Superintendent of Insurance of the
State of New York, as Liquidator of Galaxy and Administrator of the Guaranty
Fund, sued ANIC in New York State Supreme Court. The complaint alleges, among
other things, breach of contract and demands that ANIC specifically perform its
alleged obligations under the Certificates. The complaint seeks an amount in
excess of $6.5 million in damages.

As reflected above, the suit seeks 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's position continues to be
that the Guaranty Fund has no 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 on March 31, 1998. ANIC will
continue to vigorously defend itself against any such claims and its alleged
liability in the suit. Although the suit is of recent origin and the Company is
not in a position to estimate the magnitude of exposure for indemnification or
reimbursement, it continues to believe that the ultimate resolution of the
matter will not have a material adverse effect on the financial condition or
results of operations of the Company.

In November 1997, suit was filed against ALIC by four long-term care
policyholders seeking to represent a class of North Dakota policyholders
alleging breach of contract, fraud and misrepresentation regarding an alleged
promise not to raise premiums "too much". Said long-term care insurance business
was entirely reinsured to and assumed by Commonwealth Life Insurance Company
("Commonwealth") of Louisville, Kentucky, in 1991. The matter was tendered to
Commonwealth to defend on behalf of ALIC pursuant to the applicable provisions
of the reinsurance agreement between the parties, and Commonwealth also tendered
the matter back to ALIC. The allegations of fraud and misrepresentation at the
time of sale of the long-term care policies are based on alleged statements that
premiums "would not be raised too much" even though the policy on its face
stated that the "Company reserves the right to increase premiums at ANYTIME."
Moreover, premiums were increased subsequent to the reinsurance of the business
by ALIC and all increases appear to have been approved by the proper regulatory
authority. The Company and Commonwealth are cooperating to vigorously defend the
matter. Joint motions to dismiss and to strike the class action allegations were
recently filed in the U.S. District Court, District of North Dakota,
Southeastern Division. Both motions are currently pending before the Court. The
Company believes there is little or no exposure of liability for ALIC and the
matter will not have a material adverse effect on the financial condition or
results of operations of the Company. In the event the plaintiffs prevail
however, the Company believes that it has the right to seek indemnification from
Commonwealth.



                                       12
<PAGE>   13


                ACCEL INTERNATIONAL CORPORATION AND SUBSIDIARIES

        NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS-(CONTINUED)


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

When the suit was filed, the Company had initiated a transaction to sell one
hundred percent of ALIC to Lyndon. Due to the recent filing of the suit, Lyndon
requested a separate indemnification for the matter. Accordingly, the Company
agreed to provide additional indemnification, fully assume and directly pay for
all defense costs of the litigation against ALIC, and to directly pay any
settlement costs, judgments or other liabilities incurred in connection with the
litigation. The indemnification shall expire on its terms when and if there is a
final, nonappealable determination that class certification in the matter is
denied. The obligation of the Company is insured by a bond of indemnity in the
amount of $3,000,000 issued by ANIC.



                                       13
<PAGE>   14


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

      Operating Results for the Three Months Ended March 31, 1998 and 1997

OPERATING RESULTS

On October 20, 1997, ACCEL entered into agreements to sell to Lyndon Insurance
Group, Inc. and Lyndon Life Insurance Company (collectively, "Lyndon") the
outstanding capital stock of Acceleration Life Insurance Company ("ALIC"),
Acceleration National Service Company ("ANSC") and Dublin International Limited
("Dublin") (collectively, the "Target Corporations") for $30.2 million in cash
and to sell to Lyndon Property Insurance Company ("Lyndon Property") assets
related to the vehicle extended service contract business of ACCEL's wholly
owned subsidiary, Acceleration National Insurance Company ("ANIC"), for $10.3
million in cash. The sale was effective December 31, 1997.

The agreements provided that within 125 days after the closing, the sales price
for the Target Corporations would be decreased or increased by the amount, if
any, by which the Target Corporations' combined GAAP stockholder's equity as of
December 31, 1997 was less than or greater than, respectively, $31.6 million. As
of December 31, 1997, the combined GAAP stockholder's equity of the Target
Corporations was $32.1 million which resulted in a net sales price of
approximately $41 million.

The "Receivable from sale of discontinued and disposed of operations"
("receivable from sale") of approximately $.5 million as of March 31, 1998
represents the difference between the net sales price of $41 million and the
initial sales price of $40.5 million. The receivable from sale of approximately
$25 million as of December 31, 1997 represents the net sales proceeds of $41
million less the note payable and accrued interest of $16 million transferred to
ALIC by an unaffiliated company on December 31, 1997. The Company has filed a
legal action seeking declaratory judgment relief relating to a disagreement with
Lyndon concerning the exact amount of the net sales price. Accordingly, the
receivable from sale may be more or less than $.5 million. The Company believes
the resolution of the matter will not have a material adverse effect on the
financial condition or results of operations of the Company.

In conjunction with the sale, on January 1, 1998, ANIC ceded via a quota share
reinsurance agreement 100% of its liability related to the vehicle extended
service contract business to Lyndon Property. Upon consummation of the
aforementioned sale, the Company ceased to be engaged in the auto aftermarket
credit insurance and extended service contract businesses. The consolidated
financial statements of the Company have been reclassified to reflect the
disposition of ALIC and Dublin that comprised the Life/Health business segment.
Accordingly, the assets, liabilities, revenues, benefits and expenses, and cash
flows of ALIC and Dublin have been excluded from the respective captions in the
unaudited consolidated balance sheets, unaudited consolidated statements of
operations, and unaudited consolidated statements of cash flows for 1997. The
net operating results of these entities have been reported, net of applicable
income taxes, as "Income from discontinued operations", the assets and
liabilities of these entities have been reported as "Assets of discontinued
operations" and "Liabilities of discontinued operations", and the net cash flows
of these entities have been reported as "Net cash (used in) provided by
discontinued operations" for 1997. The vehicle extended service contract
business sold to Lyndon Property and ANSC were components of the Company's
property and casualty segment, and therefore are included in continuing
operations for 1997.

The loss before federal income taxes and discontinued operations for the three
months ended March 31, 1998 was $508,000 compared to a loss of $251,000 for the
same period in 1997. The Company's primary product line, commercial auto,
produced a positive underwriting margin in the first quarter of 1998 of
approximately $300,000 while net investment income contributed $600,000. These
contributions were primarily offset by general and administrative expenses of
$1.3 million and taxes, licenses and fees other than premium taxes of $100,000.
The Company's commercial auto program continued its growth, producing $10.9
million of annualized premium in the first quarter of 1998 compared to $5
million in the first quarter of 1997.

Net premiums earned increased $1.1 million with $4.9 million in the first
quarter of 1998 compared to $3.8 million for the comparable period in 1997. The
28% increase is attributable to increased premiums in the commercial auto
business. The net loss and loss adjustment expense ratios were 79.2% for the
first quarter of 1998 as compared to 70.7% for the same period in 1997. This
increase is attributable to higher than expected losses from the Company's large
trucking accounts. These policies have since been non-renewed or canceled;
however, some development may persist in the future.

Commissions and selling expenses as a percent of gross premiums were 16% for the
first three months of 1998 compared to 17.6% for the same period in 1997 due
largely to commercial auto becoming the predominant product line for the
Company. The commercial auto line of business has lower acquisition costs than
the Company's extended service contract business which was fully ceded to Lyndon
effective January 1, 1998.

A positive impact on 1997 earnings was the level of service fees on the extended
service contracts which amounted to $.5 million. These service fees are
non-recurring in 1998 due to the sale of the extended service contract business
to Lyndon.

Reinsurance expense recoveries increased $1.1 million or 266% in 1998 due to the
increase in the commercial auto business written and reinsurance agreements in
place on this business. 



                                       14
<PAGE>   15

The Company's general and administrative expenses increased by $300,000 or 30%
in the first three months of 1998 compared to the same period in 1997. This
increase is largely due to increased salaries which were previously allocated to
the subsidiaries sold effective December 31, 1997.

REVENUE

Gross premium writings for the first quarter of 1998 were $13.8 million compared
to $7.4 million for 1997. Premiums written increased by $6.4 million for the new
property and casualty programs and decreased $.3 million for the vehicle
extended service contract program (which is fully ceded to Lyndon Property in
1998).

Net premium earned was $4.9 million and $3.8 million for the first quarter of
1998 and 1997, respectively. The increase in 1998 compared to 1997 is primarily
due to increased premium writings in the commercial auto business.

LIQUIDITY AND CAPITAL RESOURCES

The Company's cash flows from operations have generally been adequate for its
current operating needs. The Company's long haul trucking, charter bus and
paratransit business generally is written for a term of one year with the
casualty claim-related liabilities extending beyond that period. The Company's
liability on vehicle extended service contracts typically has extended for
either one-year or five-year periods. However as previously discussed, the
Company's existing vehicle extended service contract business was ceded to
Lyndon Property effective January 1, 1998.

The Company's "available for sale" fixed maturity securities at March 31, 1998
and 1997 include 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, 1998, the Company did not have a significant amount of higher risk mortgage
or asset backed securities which 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 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 could pay a dividend of approximately $8.8 million without Ohio Department
approval to ACCEL in 1998.

The Company used a portion of the proceeds from the sale upon closing in January
1998 of the Auto Aftermarket Group to retire the outstanding balance of $15
million of senior notes held by ALIC, who had received them from an unaffiliated
company, along with accrued interest of approximately $1.1 million, to make a
capital contribution of $3.5 million to ANIC, to provide for taxes on the sale
of approximately $4.3 million, to transfer $8.8 million in cash to Lyndon in
connection with the ceding of the existing vehicle extended service business on
January 1, 1998 and will utilize the remainder for general corporate purposes.

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 four long-term care
policyholders, see "Note E" in the Notes to Unaudited Consolidated Financial
Statements. In management's opinion, based on the advice of and information
obtained from 



                                       15
<PAGE>   16

outside counsel, the ultimate resolution of the pending legal matters will not
have a material adverse effect on the financial condition or results of
operations of the Company.

Effective March 31, 1998, the Company purchased a 25% interest in the common
stock of USA Insurance Group, Inc., the parent company of Transportation
Insurance Specialists, the Company's general agent, for $5 million. This
investment is included in other invested assets and is accounted for using the
equity method.

In June 1997, the Financial Accounting Standards Board issued Statement of
Accounting Standards ("SFAS") No. 130, Reporting Comprehensive Income, effective
for years beginning after December 15, 1997. This SFAS establishes standards for
reporting and display of comprehensive income and its components. The adoption
of SFAS No. 130 does not affect results of operations or financial position, but
affects their presentation and disclosure. The Company adopted SFAS No. 130 as
of January 1, 1998.

The Company adopted the reporting requirements of SFAS No. 131, Disclosures
about Segments of an Enterprise and Related Information, in the first quarter of
1998. Adoption of this SFAS had no effect on net income of the Company. SFAS No.
132, Employer's Disclosures about Pensions and Other Postretirement Benefits is
effective for fiscal years beginning after December 15, 1997. This SFAS will not
affect the Company's financial statement presentation or related disclosures as
the Company does not offer pension or other postretirement benefits to employees
or former employees.

Although the cumulative effects of inflation on premium growth cannot be fully
determined, increases in the value of commercial property results in increased
premiums for property coverages. The combination of severity (which is affected
by inflation) and frequency of loss trends in commercial auto and general
liability are recognized in premium increases or decreases by the adoption of
filed premium rates.

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, 1999 is the
expected date of implementation, the implementation is ultimately dependent upon
an insurer's state of domicile. Implementation of the codified statutory
accounting principles may affect the surplus level of ANIC on a statutory basis.
Management is unable at this time to determine what impact, if any, this project
will have on the statutory surplus of ANIC.

CAUTIONARY STATEMENT REGARDING FORWARD LOOKING STATEMENTS

The 1995 Private Securities Litigation Reform Act provides issuers the
opportunity to make cautionary statements regarding forward-looking statements.
Accordingly, any forward-looking statement contained herein or in any other oral
or written statement by the Company or any of its officers, directors or
employees is qualified by the fact that actual results of the Company may differ
materially from such statement due to the following important factors, among
other risks and uncertainties inherent in the Company's business: state
insurance regulations, rate competition, adverse changes in interest rates,
unforeseen losses with respect to loss and settlement expense reserves for
unreported and reported claims, and catastrophic events.



                                       16
<PAGE>   17

PART II.  OTHER INFORMATION

ITEM 6.  Exhibits and Reports on Form 8-K

   (b) The Company filed one report on Form 8-K during the first quarter ended
March 31, 1998.

        Item Reported: Item 2 - Acquisition or disposition of assets
        Financial Statements: Pro Forma Financial Information included in the
            Company's Proxy Statement dated December 18, 1997 relating to the
            Special Meeting of Stockholders held on December 30, 1997 is
            incorporated by reference.
        Date Filed: January 15, 1998

                                   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


DATED:   April 14, 1998       BY: /s/ Cindy Moore
         --------------           -------------------------------------
                                  Cynthia A. Moore
                                  Senior Vice President, Chief Financial Officer
                                  and Treasurer*

*Ms. Moore has been duly authorized to execute the report on behalf of the 
 Registrant.


                                       17
<PAGE>   18

                               INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NUMBER             DESCRIPTION
--------------             -----------
<S>                  <C>
      27             Financial Data Schedule
</TABLE>