Exhibit 4.2(2)

                  FIRST  SUPPLEMENTAL  INDENTURE,  dated as of January  15, 1998
between SYMONS INTERNATIONAL GROUP, INC., a corporation organized under the laws
of the State of Indiana (the  "Company"),  having its  principal  office at 4720
Kingsway Drive,  Indianapolis,  Indiana 46205, and WILMINGTON  TRUST COMPANY,  a
Delaware  banking  corporation duly organized and existing under the laws of the
State of Delaware, as Trustee (hereinafter called the "Trustee").


                             RECITALS OF THE COMPANY

                  WHEREAS,  the Company has heretofore executed and delivered to
the Trustee a certain indenture,  dated as of August 12, 1997 (the "Indenture"),
pursuant to which one series of senior  subordinated  notes of the Company  (the
"Securities") were issued.  All terms used in this First Supplemental  Indenture
that are defined in the  Indenture  shall have the meanings  assigned to them in
the Indenture;

                  WHEREAS,  Section 9.1 of the  Indenture  provides that without
the consent of the Holders of the Securities,  the Company, when authorized by a
resolution  of its  Board  of  Directors,  and the  Trustee  may  enter  into an
indenture supplemental to the Indenture for certain purposes;

                  WHEREAS,  the  Company  pursuant to the  foregoing  authority,
proposes in and by this First  Supplemental  Indenture to amend the Indenture in
certain respects with respect to the Securities of any series created before the
date hereof; and

                  WHEREAS,  all things necessary to make this First Supplemental
Indenture a valid agreement of the Company and the Trustee and a valid amendment
of and supplement to the Indenture have been done.

                  NOW, THEREFORE, THIS FIRST SUPPLEMENTAL INDENTURE
WITNESSETH:

                  For and in  consideration  of the premises and the purchase of
the Securities by the Holders thereof, it is mutually covenanted and agreed, for
the equal  and  proportionate  benefit  of all  Holders  of the  Securities,  as
follows:


<PAGE>


                                                                               2

                                    ARTICLE I

                                  PROVISIONS OF
                               GENERAL APPLICATION

                  SECTION   Definitions

                  (a) The following  definitions in Section 1.1 of the Indenture
are hereby amended as follows:

                  "Board of Directors"  means,  with respect to the Company or a
Subsidiary, as the case may be, the Board of Directors (or other body performing
functions similar to any of those performed by a Board of Directors).

                  "Change  of  Control"  means  any  transaction  or  series  of
transactions  in which any  Person or group  (within  the  meaning of Rule 13d-5
under the  Exchange Act and Section  13(d) and 14(d) of the Exchange  Act) other
than the Company and its Subsidiaries  acquires all or substantially  all of the
Company's  assets or  becomes  the  direct or  indirect  "beneficial  owner" (as
defined in Rule 13d-3 under the Exchange Act), by way of merger,  consolidation,
other business combination or otherwise, of greater than 50% of the total voting
power  (on a fully  diluted  basis  as if all  convertible  securities  had been
converted and all options and warrants had been  exercised)  entitled to vote in
the election of directors of the Company or the Surviving  Person (if other than
the Company).

                  "Marketable  Securities" means securities listed on a national
securities  exchange  which  have a minimum  weekly  trading  volume of at least
100,000 shares.

                  "Permitted  Investment"  means an Investment by the Company or
any Subsidiary in (i) a Person that will, upon the making of such Investment, be
or become a Subsidiary; provided that the primary business of such Subsidiary is
a Related  Business;  (ii) a Person if as a result of such Investment such other
Person is merged or  consolidated  with or into,  or transfers or conveys all or
substantially all its assets to, the Company or a Subsidiary; provided that such
Person's  primary  business  is  a  Related   Business;   (iii)  Temporary  Cash
Investments;  (iv) any demand  deposit  account  with an  Approved  Lender;  (v)
receivables owing to the Company or any Subsidiary if created or acquired in the
ordinary  course of business and payable or  dischargeable  in  accordance  with
customary  trade  terms;  provided  that  such  trade  terms  may  include  such
concessionary trade terms as the Company or any such Subsidiary deems reasonable
under the  circumstances;  (vi)  payroll,  travel and similar  advances to cover
matters that are expected at the time of such advances  ultimately to be treated
as expenses for accounting  purposes and that are made in the ordinary course of
business;  (vii) loans or advances to employees  made in the ordinary  course of
business  consistent  with past  practices  of the  Company or such  Subsidiary;
(viii) stock,  obligations or securities received in settlement of debts created
in the ordinary course of business and owing to the Company or any Subsidiary or
in  satisfaction  of  judgments;  (ix) any Person to the extent such  Investment
represents the non-cash portion of the consideration


<PAGE>


                                                                               3

received for an Asset  Disposition as permitted  pursuant to Section 10.13;  and
(x) any Affiliate (the primary business of which is a Related  Business) that is
not  a  Subsidiary,   provided  that  the  aggregate  of  all  such  Investments
outstanding  at any one time under this clause (x) shall not exceed  $1,000,000;
(xi) Investments by the Subsidiaries in Investment Grade  Securities;  and (xii)
Investments by the Subsidiaries in  Non-Investment  Grade  Securities;  provided
that on the  date  such  Investment  is  made,  the  fair  market  value of such
Investment  when taken with all other such  Investments  shall not exceed in the
aggregate 15% of the total Invested Assets of the Subsidiaries taken as a whole;
provided further that such Investment in other  Investment-Grade  Securities and
Non-Investment  Grade  Securities in any single issuer,  together with all other
investments  in the same issuer,  as determined  at the date such  Investment is
made and after giving effect  thereto,  shall not exceed in the aggregate  those
percentages of the total Invested Assets of the Subsidiaries  permitted by state
law or regulations  (as they may be amended from time to time)  determined as of
the end of the preceding calendar quarter; and provided further that this clause
(xii) shall not prohibit an Investment that qualifies as a Permitted  Investment
under clauses (i) or (ii) above.

                  "Related  Business"  means the business of providing  property
and  casualty  insurance  to  individuals  or farms  and any  business  related,
ancillary or complementary to such business of the Company.

                  "Temporary Cash Investments"  means any of the following:  (a)
securities  issued or  directly  and fully  guaranteed  or insured by the United
States of America or any agency or  instrumentality  thereof  (provided that the
full  faith and  credit of the  United  States of  America is pledged in support
thereof),  (b) time  deposits  and  certificates  of  deposit,  eurodollar  time
deposits  and  eurodollar  certificates  of deposit of (i) any lender  under the
Credit  Agreement,  or (ii) any  United  States  commercial  bank of  recognized
standing (y) having capital and surplus in excess of $500,000,000  and (z) whose
short-term  commercial  paper rating from S&P is at least A-1 or the  equivalent
thereof or from Moody's is at least P-1 or the equivalent thereof (any such bank
being an "Approved  Lender"),  in each case with maturities of not more than 270
days from the date of  acquisition,  (c) commercial  paper and variable or fixed
rate notes issued by an Approved  Lender (or by the parent company  thereof) and
maturing within six months of the date of acquisition, (d) repurchase agreements
entered  into by a Person  with a bank or trust  company  (including  any of the
lenders  under the Credit  Agreement)  or  recognized  securities  dealer having
capital and surplus in excess of $500,000,000 for (i) direct  obligations issued
by or fully  guaranteed by the United  States of America,  (ii) time deposits or
certificates  of  deposit   described  under  subsection  (b)  above,  or  (iii)
commercial  paper or other notes described under subsection (c) above, in which,
in each such case,  such bank,  trust  company or dealer  shall have a perfected
first priority  security interest (subject to no other Liens) and having, on the
date of purchase thereof,  a fair market value of at least 100% of the amount of
the repurchase obligations, (e) obligations of any State of the United States or
any political  subdivision thereof, the interest with respect to which is exempt
from federal  income  taxation  under Section 103 of the U.S.  Internal  Revenue
Code,  having a long  term  rating  of at least  AA- or Aa-3 by S&P or  Moody's,
respectively,  and  maturing  within  three  years from the date of  acquisition
thereof,  (f) Investments in municipal auction preferred stock (i) rated AAA (or
the equivalent thereof) or better by S&P or Aaa (or the


<PAGE>


                                                                               4

equivalent  thereof) or better by Moody's and (ii) with  dividends that reset at
least once every 365 days and (g)  Investments,  classified in  accordance  with
GAAP as current assets, in money market investment programs registered under the
Investment Company Act of 1940, as amended,  which are administered by reputable
financial   institutions  having  capital  of  at  least  $100,000,000  and  the
portfolios of which are limited to  Investments  of the  character  described in
clauses (a), (b), (c), (e) and (f) above.

                  (b) The following  definitions are hereby added to Section 1.1
of the Indenture:

                  "Invested Assets" means the amount on a consolidated  basis of
a Person's  Investments  as reflected  on such  Person's  most recent  quarterly
balance sheet prepared in accordance with GAAP.

                  "Investment  Grade  Securities"  means:  (i)  U.S.  Government
Obligations;  (ii) any  certificate of deposit,  maturing not more than 270 days
after the date of  acquisition,  issued  by, or time  deposit  of, a  commercial
banking  institution  that has  combined  capital  and  surplus of not less than
$100.0 millon or its equivalent in foreign currency,  whose debt is rated at the
time as of which any investment  therein is made,  "A" (or higher)  according to
S&P or Moody's, or if neither S&P nor Moody's shall then exist or if the debt of
such bank has not been rated by S&P or Moody's, the equivalent of such rating by
any other internationally  recognized securities rating agency; (iii) commercial
paper, maturing not more than 270 days after the date of acquisition,  issued by
a  corporation  (other than an  Affiliate  or  Subsidiary  of the Issuer) with a
rating,  at the time as of which any  investment  therein is made,  of "A-1" (or
higher)  according  to S&P or "P-1," (or higher)  according  to  Moody's,  or if
neither S&P nor Moody's shall then exist,  the  equivalent of such rating by any
other  internationally  recognized  securities  rating agency;  (iv) any banking
acceptances,  any private loans or any money market  deposit  accounts,  in each
case,  issued or offered by any  commercial  bank having  capital and surplus in
excess of $100.0  million or its equivalent in foreign  currency,  whose debt or
credit paying ability is rated at the time as of which any investment therein is
made, "A" (or higher) according to S&P or Moody's, or if neither S&P nor Moody's
shall  then exist or if the debt or credit  paying  ability of such bank has not
been  rated by S&P or  Moody's,  the  equivalent  of such  rating  by any  other
internationally   recognized  securities  rating  agency;  (v)  any  other  debt
securities  or debt  instruments  with a rating  of  "BBB-1"  or  higher by S&P,
"Baa-3," or higher by Moody's, Class "2" or higher by the NAIC or the equivalent
of such rating by S&P,  Moody's or the NAIC, or if none of S&P,  Moody's and the
NAIC shall then exist or if such security has not been rated by S&P,  Moody's or
the NAIC, the equivalent of such rating by any other internationally  recognized
securities rating agency; (vi) any fund investing  exclusively in investments of
the types described in clauses (i) through (v) above.

               "NAIC" means the National Association of Insurance Commissioners.

               "Non-Investment   Grade   Securities"   means  any  Investment
(including,  without limitation, debt securities, equity securities, real estate
investments and real estate loans) other than Investment Grade Securities.


<PAGE>


                                                                               5

                  "U.S.  Government  Obligations"  means securities that are (i)
direct  obligations  of the United States of America the timely payment of which
its full faith and credit is pledged or (ii) obligations of a Person  controlled
and  supervised  by and  acting as an agency or  instrumentality  of the  United
States of America the timely payment of which is unconditionally guaranteed as a
full faith obligation by the United States of America,  and shall also include a
depositary  receipt  issued by a bank (as  defined  in  Section  3(a)(2)  of the
Securities Act of 1933, as amended),  as custodian with respect to any such U.S.
Government  Obligation or a specific  payment of principal of or interest on any
such U.S.  Government  Obligation  held by such custodian for the account of the
holder of such  depositary  receipt;  provided  that (except as required by law)
such  custodian is not  authorized to make any deduction from the amount payable
to the  holder  of such  depositary  receipt  from any  amount  received  by the
custodian in respect of the U.S.  Government  Obligation or the specific payment
of principal of or interest on the U.S. Government  Obligation evidenced by such
depositary receipt.


                                   ARTICLE II

                                  MISCELLANEOUS

                  SECTION Incorporation of Indenture. All the provisions of this
First  Supplemental  Indenture shall be deemed to be incorporated in, and made a
part of, the Indenture;  and the Indenture,  as supplemented and amended by this
First Supplemental Indenture,  shall be read, taken and construed as one and the
same instrument.

                  SECTION  Application  of  First  Supplemental  Indenture.  The
provisions and benefit of this First  Supplemental  Indenture shall be effective
with respect to Outstanding Securities prior to and after the execution hereof.

                  SECTION Headings. The headings of the Articles and Sections of
the First  Supplemental  Indenture are inserted for convenience of reference and
shall not be deemed to be a part thereof.

                  SECTION Counterparts. This First Supplemental Indenture may be
executed  in any  number of  counterparts,  each of which so  executed  shall be
deemed to be an original,  but all such counterparts  shall together  constitute
but one and the same instrument.

                  SECTION  Conflict with Trust  Indenture  Act. If any provision
hereof  limits,  qualifies or conflicts with another  provision  hereof which is
required  to be  included  in this First  Supplemental  Indenture  by any of the
provisions of the Trust Indenture Act, such required provision shall control.

                  SECTION  Successors and Assigns.  All covenants and agreements
in this First  Supplemental  Indenture by the Company shall bind its  successors
and assigns, whether so expressed or not.


<PAGE>

                                                                               6

                  SECTION  Separability  Clause.  In case any  provision in this
First  Supplemental  Indenture shall be invalid,  illegal or unenforceable,  the
validity,  legality and enforceability of the remaining  provisions shall not in
any way be affected or impaired thereby.



                              [rest of page intentionally left blank]





<PAGE>


                                                                               7

                  IN WITNESS WHEREOF,  the parties hereto have caused this First
Supplemental  Indenture  to be duly  executed,  all as of the day and year first
above written.


                                    SYMONS INTERNATIONAL GROUP, INC.,
                                    as Issuer


                                    By:
                                    Name:          Alan G. Symons
                                    Title:         Chief Executive Officer

                                    By:
                                    Name:          Gary P. Hutchcraft
                                    Title:         Vice President


                                    WILMINGTON TRUST COMPANY,
                                    as Trustee


                                    By:
                                    Name:
                                    Title:



<PAGE>










STATE OF          )
                  :  ss.:
COUNTY OF         )



                  On the day of January  __,  1998,  before me  personally  came
______________,  to me known,  who,  being by me duly sworn,  did depose and say
that he is  _______________  of Symons  International  Group,  Inc.,  one of the
corporations  described in and which executed the foregoing instrument;  that he
knows the seal of said corporation;  that the seal is affixed to said instrument
is such  corporate  seal;  that it was so affixed by  authority  of the Board of
Directors  of said  corporation;  and that he signed  his name  thereto  by like
authority.

                                                -------------------------
         Notary Public


[NOTARIAL SEAL]

My Commission Expires:





<PAGE>








STATE OF          )
                  :  ss.:
COUNTY OF         )



                  On the day of January, 1998, before me personally came , to me
known,  who, being by me duly sworn, did depose and say that he is of Wilmington
Trust  Company,  one of the  corporations  described  in and which  executed the
foregoing instrument; that he knows the seal of said corporation;  that the seal
affixed to said  instrument is such  corporate  seal;  that it was so affixed by
authority of the Board of Directors of said corporation;  and that he signed his
name thereto by like authority.

                                                -------------------------
         Notary Public



[NOTARIAL SEAL]


My Commission Expires:

<PAGE>





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                        SYMONS INTERNATIONAL GROUP, INC.
                                    As Issuer


                            WILMINGTON TRUST COMPANY
                                   As Trustee






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



                               FIRST SUPPLEMENTAL
                          SENIOR SUBORDINATED INDENTURE


                          Dated as of January 15, 1998






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