<PAGE>   1
                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                   FORM 10-Q



(Mark One)

[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the quarterly period ended March 31, 1997

                                       OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
    ACT OF 1934

For the transition period from _____________ to _____________

                         Commission file number 0-21223


                PROFESSIONALS INSURANCE COMPANY MANAGEMENT GROUP
             (Exact name of registrant as specified in its charter)


                Michigan                               38-3273911
        (State of Incorporation)          (I.R.S. Employer Identification No.)

       4295 Okemos Road, Box 2510
            Okemos, Michigan                           48805-9510
(Address of principal executive offices)               (Zip Code)

Registrant's telephone number, including area code:  (517) 349-6500



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 / /
                                               

The number of shares of the registrant's common stock, no par value per share,
outstanding as of May 12, 1997 was 3,505,750.





<PAGE>   2


                               TABLE OF CONTENTS


<TABLE>
<S>                                                                                                  <C>
                                                                                                      PAGE NO.
PART I.        FINANCIAL INFORMATION

               Item 1.  Financial Statements

                            Condensed Consolidated Balance Sheets at March 31, 1997 (Unaudited)
                            and December 31, 1996                                                          3

                            Condensed Consolidated Statements of Income for the Three Months
                            Ended March 31, 1997 and 1996 (Unaudited)                                      4

                            Condensed Consolidated Statements of Cash Flows for the Three Months
                            Ended March 31, 1997 and 1996 (Unaudited)                                      5

                            Notes to Condensed Consolidated Financial Statements (Unaudited)             6-7

               Item 2.  Management's Discussion and Analysis of Financial Condition
                        and Results of Operations                                                        8-12

PART II.       OTHER INFORMATION
        
               Item 5.  Other Information                                                               12-13
        
               Item 6.  Exhibits and Reports on Form 8-K                                                   13

               Signatures                                                                                  14
</TABLE>




                                      -2-



<PAGE>   3
PART I.   FINANCIAL INFORMATION
Item 1.   Financial Statements


                PROFESSIONALS INSURANCE COMPANY MANAGEMENT GROUP
                                AND SUBSIDIARIES
                     Condensed Consolidated Balance Sheets

<TABLE>
<CAPTION>
                                                                                      March 31,             December 31,  
                            Assets                                                      1997                   1996        
                            ------                                                    --------              ------------  
<S>                                                                                 <C>                <C>                  
Investments:                                                                          (Unaudited)                           
   Fixed maturities available for sale, at fair value                                                                       
      (amortized cost:  $281,792,000 and $285,976,000)                              $278,205,000           $286,274,000     
   Equity securities available for sale, at fair value                                                                      
      (cost:  $2,632,000 and $2,630,000)                                               2,703,000              2,692,000     
   Short-term investments, at cost                                                    13,529,000             10,711,000     
   Real estate, at cost, net of accumulated depreciation                                 450,000                455,000     
                                                                                     -----------           ------------     
               Total investments                                                     294,887,000            300,132,000     
Cash                                                                                   2,059,000              2,023,000     
Premiums due from policyholders                                                       10,835,000              7,268,000     
Amounts due from reinsurers                                                           16,679,000             17,550,000     
Accrued investment income                                                              3,996,000              3,885,000     
Deferred federal income taxes                                                         18,063,000             17,301,000     
Property and equipment, at cost, net of                                                                                     
   accumulated depreciation                                                            2,407,000              2,459,000     
Deferred policy acquisition costs                                                        998,000                998,000     
Other assets                                                                          10,065,000              5,766,000     
                                                                                    ------------           ------------     
               Total assets                                                         $359,989,000           $357,382,000     
                                                                                    ============           ============     
                                                                                                                            
             Liabilities and Shareholders' Equity                                                                           
             ------------------------------------
Liabilities:                                                                                                                
   Loss and loss adjustment expense reserves                                        $222,363,000           $219,919,000     
   Reserve for extended reporting period claims                                       14,895,000             14,795,000     
   Unearned premiums                                                                  25,424,000             21,945,000     
   Accrued expenses and other liabilities                                              9,254,000             12,765,000     
                                                                                    ------------           ------------     
               Total liabilities                                                     271,936,000            269,424,000     
                                                                                    ------------           ------------     
Shareholders' equity:
   Preferred stock, no par value; 5,000,000 shares authorized;
      no shares issued and outstanding                                                    -                    -      
   Common stock, no par value; 25,000,000 shares authorized;                                                          
      3,505,750 shares issued and outstanding in 1997 and 1996                         3,506,000             3,506,000
   Additional paid-in capital                                                         14,569,000            14,569,000
   Retained earnings                                                                  72,266,000            69,645,000
   Net unrealized appreciation (depreciation) on investments,                                                         
      net of deferred federal income taxes                                            (2,288,000)              238,000
                                                                                  --------------        --------------
               Total shareholders' equity                                             88,053,000            87,958,000
                                                                                  --------------        --------------
               Total liabilities and shareholders' equity                           $359,989,000          $357,382,000
                                                                                  ==============        ==============
</TABLE>                                                                       
                                   

See accompanying notes to the unaudited condensed consolidated financial
statements.


                                     -3-


<PAGE>   4
                PROFESSIONALS INSURANCE COMPANY MANAGEMENT GROUP
                                AND SUBSIDIARIES
                  Condensed Consolidated Statements of Income
                                  (Unaudited)

<TABLE>
<S>                                                                <C>
                                                                                Three Months Ended
                                                                                      March 31,
                                                                          --------------------------------
                                                                             1997                1996
                                                                          -------------       ------------
Revenues and other income:
   Net premiums written                                                     $14,376,000        $16,448,000
   Increase in unearned premiums, net of prepaid reinsurance premiums        (1,985,000)        (2,111,000)
                                                                          -------------       ------------
   Premiums earned, net                                                      12,391,000         14,337,000
   Net investment income                                                      4,172,000          3,869,000
   Net realized investment losses                                               (36,000)           (14,000)
   Other                                                                         54,000             83,000
                                                                          -------------       ------------
      Total revenues and other income                                        16,581,000         18,275,000
                                                                          -------------       ------------

Expenses:
   Losses and loss adjustment expenses, net                                  10,384,000         12,416,000
   Increase in reserve for extended reporting period claims                     100,000            100,000
   Policy acquisition and other underwriting expenses                         2,635,000          2,593,000
                                                                          -------------       ------------
      Total expenses                                                         13,119,000         15,109,000
                                                                          -------------       ------------

      Income from operations before federal income taxes                      3,462,000         3,166,000

Federal income taxes                                                           (841,000)         (839,000)
                                                                          -------------       ------------
      Net income                                                             $2,621,000        $2,327,000 
                                                                          =============       ============

Net income per common share                                                       $0.75             $0.68
                                                                          =============       ============

Weighted average shares outstanding                                           3,506,380         3,443,629
                                                                          =============       ============
</TABLE>

See accompanying notes to the unaudited condensed consolidated financial
statements.




                                     -4-
<PAGE>   5
                PROFESSIONALS INSURANCE COMPANY MANAGEMENT GROUP
                                AND SUBSIDIARIES
                Condensed Consolidated Statements of Cash Flows
                                  (Unaudited)

<TABLE>
                                                                           Three Months Ended March 31,
                                                                           ----------------------------
                                                                                1997             1996
                                                                              --------         --------
<S>                                                                          <C>             <C>

Net cash provided by (used in) operating activities                           ($987,000)      $1,813,000
                                                                              ---------       ----------
Cash flows from investing activities:
   Proceeds from sale or maturity of short-term investments                  81,775,000       96,471,000
   Purchases of short-term investments                                      (84,490,000)     (90,668,000)
   Proceeds from maturity of securities available for sale                      370,000        1,000,000
   Proceeds from sale of securities available for sale                       19,385,000       53,952,000
   Purchases of securities available for sale                               (15,927,000)     (58,372,000)
   Payable for securities                                                        -            (3,205,000)
   Purchases of property and equipment                                          (90,000)         (53,000)
   Payment on liability for purchased book of business                           -              (894,000)
                                                                            -----------      -----------
      Net cash provided by (used in) investing activities                     1,023,000       (1,769,000)
                                                                            -----------      -----------

Net increase in cash                                                             36,000           44,000

Cash, beginning of period                                                     2,023,000        1,279,000
                                                                              ---------        ---------

Cash, end of period                                                          $2,059,000       $1,323,000
                                                                             ==========       ==========

Supplemental disclosure of non-cash investing
   and financing activities:
   Issuance of treasury shares as stock bonus                                    $-             $697,000
                                                                             ==========       ==========
</TABLE>

See accompanying notes to the unaudited condensed consolidated financial
statements.




                                      5
<PAGE>   6


                PROFESSIONALS INSURANCE COMPANY MANAGEMENT GROUP
                                AND SUBSIDIARIES
        Notes to Condensed Consolidated Financial Statements (Unaudited)


(1) Basis of Presentation

      Professionals Insurance Company Management Group ("Professionals Group,"
      and with its direct and indirect subsidiaries, the "Company") is
      a business corporation incorporated under the laws of the State of
      Michigan on January 31, 1996 that functions as an insurance holding
      company.  Professionals Group has four direct wholly-owned subsidiaries
      and two indirect wholly-owned subsidiaries.  The direct wholly-owned
      subsidiaries are PICOM Insurance Company ("PICOM"), PICOM Insurance
      Agency, Inc. ("PIA"), PICOM Financial Services Corporation ("PFSC") and
      American Insurance Management Corporation ("AIMC").  The indirect
      wholly-owned entities, all of which are wholly-owned subsidiaries of
      PICOM, are PICOM Claims Services Corporation ("PCSC") and PICOM Insurance
      Company of Illinois ("PICOM-Illinois").

      PICOM is a stock, property and casualty insurer incorporated under the
      laws of the State of Michigan in 1980.  PICOM offers professional
      liability insurance to providers of health care services in Michigan,
      Indiana and Ohio and provides malpractice coverage to lawyers and law
      firms in Michigan.  PIA is an inactive Michigan insurance agency
      incorporated under the laws of the State of Michigan on March 31, 1981.
      PFSC is an inactive business corporation incorporated under the laws of
      the State of Michigan on May 29, 1986.  AIMC is an Indiana corporation
      that serves as the attorney-in-fact for American Medical Insurance
      Exchange, an Indiana interinsurance reciprocal exchange.  PCSC provides
      claims management services on a fee for service basis and was
      incorporated under the laws of the State of Michigan on December 10,
      1985.  PICOM-Illinois is a stock, property and casualty insurer
      incorporated under the laws of the State of Illinois on December 5, 1994.
      PICOM-Illinois provides medical malpractice insurance to physicians and
      clinics in Illinois.

      The accompanying unaudited condensed consolidated financial statements of
      the Company have been prepared in conformity with generally accepted
      accounting principles for interim financial information and with the
      instructions for Form 10-Q and Rule 10-01 of Regulation S-X.
      Accordingly, they do not include all of the information and footnotes
      required by generally accepted accounting principles for complete
      financial statements.  All significant intercompany transactions have
      been eliminated in consolidation.

      In the opinion of management, all adjustments (consisting of normal
      recurring adjustments) considered necessary for a fair presentation of
      financial position and results of operations have been included.  The
      operating results for the three month period ended March 31, 1997 are not
      necessarily indicative of the results to be expected for the year ending
      December 31, 1997.



                                      -6-



<PAGE>   7



                PROFESSIONALS INSURANCE COMPANY MANAGEMENT GROUP
                                AND SUBSIDIARIES
  Notes to Condensed Consolidated Financial Statements (Unaudited), Continued


(2)  Net Income Per Share

      Net income per share is computed by dividing net income by the weighted
      average number of shares of common stock and common stock equivalents
      (stock options) outstanding during each period after giving effect to
      stock dividends and treasury shares, calculated on a daily basis.

(3)  Subsequent Events

      In April 1997, the Company signed an agreement with Michigan Educational
      Employees Mutual Insurance Company, a Michigan-domiciled specialty writer
      of personal automobile and homeowners coverages for teachers and other
      members of the educational community in Michigan.  Concurrent with this
      transaction, Professionals Group obtained $22.5 million in proceeds from
      a seven-year unsecured term loan from a bank.  See Item 5 - Other
      Information herein for further discussion of these transactions.

(4) New Accounting Pronouncements

      The Financial Accounting Standards Board has issued Statement of
      Financial Accounting Standards No. 128 "Earnings Per Share" ("SFAS No.
      128") which is effective for financial statements issued for both interim
      and annual periods ending after December 15, 1997.  Earlier application
      is not permitted.  This standard replaces the presentation of primary
      earnings per share with a presentation of basic earnings per share and
      also requires dual presentation of basic and diluted earnings per share
      for all entities with complex capital structures.  Because early adoption
      of SFAS No. 128 is not permitted, there is no impact on the Company's
      earnings per share amounts for the interim periods presented herein.
      However, upon adoption in the fourth quarter of 1997, all prior interim
      and annual period earnings per share data presented will be restated to
      conform with the provisions of SFAS No. 128.  The Company does not expect
      the impact of the adoption of SFAS No. 128 to be material to previously
      reported earnings per share amounts.



                                      -7-



<PAGE>   8


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

     The following discussion and analysis should be read in conjunction with
the condensed consolidated financial statements and the notes thereto included
elsewhere in this report and the Company's Annual Report to Shareholders for
the year ended December 31, 1996.


Financial Condition -- March 31, 1997 Compared to December 31, 1996:

     Total assets increased to $360.0 million at March 31, 1997, as compared to
$357.4 million at December 31, 1996, primarily due to increases in premiums due
from policyholders and prepaid reinsurance premiums (included in other assets
in the accompanying condensed consolidated balance sheets).  The increases in
premiums due from policyholders and prepaid reinsurance premiums were a result
of the timing of renewals for a significant portion of the Company's Illinois
book of business, which typically occurs during the first quarter.  These
increases were offset by a decrease in invested assets which is further
explained below.

     Invested assets were $294.9 million, or approximately 82% of the Company's
total assets at March 31, 1997.  This compares to invested assets of $300.1
million, or approximately 84% of the Company's total assets at December 31,
1996.  The Company's investment portfolio continues to be dominated by fixed
maturity securities at March 31, 1997, and primarily consists of U.S.
government and agency bonds, high-quality corporate bonds, mortgage-backed
securities and tax-exempt U.S. municipal bonds.  The entire fixed maturity
portfolio, which is classified as available-for-sale, and is carried at fair
value, is sensitive to interest rate changes.  At March 31, 1997, the fixed
maturity portfolio had a fair value that was $3.6 million less than the $281.8
million amortized cost of such portfolio.  At December 31, 1996, the fixed
maturity portfolio had a fair value that was $298,000 higher than the $286.0
million amortized cost of such portfolio.  The decrease in fair value as
compared to amortized cost resulted from rising interest rates during the first
quarter of 1997 and is the primary reason for the decrease in total invested
assets.

     Loss and loss adjustment expense reserves represented approximately 82%
of the Company's consolidated liabilities at both March 31, 1997 and December
31, 1996.  These reserves are determined on the basis of individual claims and
actuarially determined estimates of future losses based on the Company's past
loss experience and projections as to future claims frequency, severity,
inflationary trends and settlement patterns.  Estimating professional liability
reserves is a complex process which is heavily dependent on judgment and
involves many uncertainties.  As a result, reserve estimates may vary
significantly from the eventual outcome.  The assumptions used in establishing
the Company's reserves are reviewed and updated regularly as new data becomes
available.  Any adjustments necessary are generally reflected in current
operations.  The loss and loss adjustment expense reserves are determined by
the Company's actuary, who is an officer of the Company and a Fellow of the
Casualty Actuarial Society.  Management of the Company believes that the loss
and loss adjustment expense reserves are adequate and are at or above the
actuarial best  estimate.  The loss and loss adjustment expense reserves have
been established on an undiscounted basis.


                                      -8-



<PAGE>   9



     Loss and loss adjustment expense reserves increased 1.1% to $222.4 million
at March 31, 1997, from $219.9 million at December 31, 1996.  This increase was
primarily attributable to an increase in outstanding claims at March 31, 1997
as compared to December 31, 1996.

     The unearned premium reserve increased to $25.4 million at March 31, 1997,
from $21.9 million at December 31, 1996.  The increase was due to the timing of
renewals for a significant portion of the Company's Illinois book of business,
which typically occurs during the first quarter.

     Shareholders' equity was $88.1 million at March 31, 1997 versus $88.0
million at December 31, 1996.  Net income of $2.6 million during the three
month period ended March 31, 1997 was offset by $2.5 million of net unrealized
depreciation on investments, net of deferred federal income taxes, which
resulted primarily from rising interest rates in the bond market.  The Company
expects to use retained earnings to increase its capital base and finance 
future growth and will defer consideration of cash dividends for the 
foreseeable future.


Results of Operations -- Three Months Ended March 31, 1997 Compared to Three
Months Ended March 31, 1996:

     For purposes of the following discussion, the Company's liability
coverages (and the related Service Marks) are defined as follows:

      CorpCare(sm) - Offers professional liability coverage for group practices;

      DoctorCare(sm) - Offers professional liability coverage for individual
      physicians, surgeons and dentists;

      HealthPro(sm) - Offers professional liability coverage for other health
      care specialists such as nurses, psychologists and optometrists;

      HealthServices(sm) - Offers professional liability coverage for health 
      care organizations such as hospitals, clinics, hospices and surgery 
      centers; and

      LawyerCare(sm) - Offers professional liability coverage for lawyers and 
      law firms.

     Net premiums written were $14.4 million for the three months ended March
31, 1997, a decrease of 12.6%, as compared to net premiums written of $16.4
million for the three months ended March 31, 1996.  The decrease in net
premiums written resulted from a $295,000 decrease in CorpCare(sm) premiums, a
$97,000 decrease in HealthServices(sm) and HealthPro(sm) premiums and a $347,000
increase in LawyerCare(sm) and other premiums.  Additionally, DoctorCare(sm)
premiums decreased by $2.0 million due primarily to the continued consolidation
of individual practices into



                                      -9-



<PAGE>   10
group practices and price-based competition in the Michigan and Illinois
insurance markets.  Of the net premiums written in 1997, approximately 90.4%
was generated by DoctorCare(sm) and CorpCare(sm) coverages, 4.7% was generated
by HealthServices(sm) and HealthPro(sm) coverages, 1.2% was generated by
LawyerCare(sm) coverage and 3.7% was generated by other types of coverage.  Of
the net premiums written in 1996, approximately 93.1% was generated by
DoctorCare(sm) and CorpCare(sm) coverages, 4.7% was generated by
HealthServices(sm) and HealthPro(sm) coverages, 0.7% was generated by   
LawyerCare(sm) coverage and 1.5% was generated by other types of coverage.

     During the three months ended March 31, 1997 and 1996, the Company
continued to balance its need for upward rate adjustments with a goal of
maintaining market share in very competitive environments in Michigan,
Illinois, Indiana and Ohio.  As a result, the Company offered discounts to its
published premium rates to retain market share and experienced margin or price
reductions as a result of competitive market conditions in those periods.
Although the Company has maintained profitability and is endeavoring to offset
lower premiums charged through more selective underwriting practices, there can
be no assurance that these practices will be successful in the long run.

     Net investment income, excluding realized capital gains and losses,
totaled $4.2 million for the three months ended March 31, 1997 as compared to
net investment income of $3.9 million for the three months ended March 31,
1996, an increase of 7.8%.  The increase in net investment income was primarily
the result of an increase in average invested assets because of continued
positive cash flows from operations.  The weighted average tax equivalent book
yield of the fixed maturity portfolio was 6.8% and 6.6% as of March 31, 1997
and 1996, respectively.  Net realized investment losses were negligible during
the three month periods ended March 31, 1997 and 1996.

     Incurred losses and loss adjustment expenses (including the increase in
reserve for extended reporting period claims) decreased to $10.5 million for
the three months ended March 31, 1997 from $12.5 million for the three months
ended March 31, 1996.  As a percentage of premiums earned, the incurred loss
and loss adjustment expense ratio (including the increase in reserve for
extended reporting period claims) was 84.6% for the three months ended March
31, 1997, down from 87.3% for the same period of 1996.  The decrease in
incurred losses and loss adjustment expenses was due primarily to favorable
development of prior years' loss reserves and slightly lower claims frequency.

     Policy acquisition and underwriting expenses were comparable at $2.6
million for the three month periods ended March 31, 1997 and 1996.  The slight
increase was attributable to higher employee-related costs because the Company
had approximately ten more employees during the first quarter of 1997 as
compared to the same period of 1996, which was offset by a reduction in
commissions paid by the Company on its Illinois book of business.  As a
percentage of premiums earned, the underwriting expense ratio was 21.3% for the
three months ended March 31, 1997, up from an underwriting expense ratio of
18.1% for the same period of 1996.  The increase was attributable to the items
mentioned previously as well as the reduction in premiums written mentioned
previously.



                                      -10-



<PAGE>   11



     The Company recorded $841,000 in federal income tax expense for the three
months ended March 31, 1997, compared to $839,000 during the same period in
1996.  The effective tax rate was 24.3% for the three months ended March 31,
1997 versus 26.5% for the three months ended March 31, 1996.  The lower
effective tax rate for the three months ended March 31, 1997 was due primarily
to increased holdings in tax-exempt municipal bonds as compared to the same
period in 1996.

     Net income for the three months ended March 31, 1997 was $2.6 million, or
$0.75 per share on revenues of $16.6 million, as compared to net income of $2.3
million, or $0.68 per share on revenues of $18.3 million, for the three months
ended March 31, 1996.  The improvement in earnings is primarily attributable to
improved net investment income and a lower incurred loss and loss adjustment
expense ratio, as described previously.


Liquidity and Capital Resources:

     Liquidity describes the ability to generate sufficient cash flows to meet
the cash requirements of continuing operations.  Liquidity, in the context of
insurance operations, is typically determined by two distinct operations:
underwriting and investing.  Net cash flows from underwriting operations are
used to build an investment portfolio, which in turn produces future cash from
investment income.  The Company continuously monitors available cash and
short-term investment balances in relation to projected cash needs to maintain
adequate balances for current payments while maximizing cash available for
longer term investment opportunities.

     The payment of losses, loss adjustment expenses and operating expenses in
the ordinary course of business represents the Company's principal need for
liquid funds.  Payments for losses and loss adjustment expenses are distributed
fairly evenly throughout the year.  Payments for reinsurance are made within
thirty days subsequent to the end of each quarter, with adjustments made after
each reinsurance year.  Historically, cash used to pay for these items has been
provided by operations.  The Company did not borrow any funds in the three
month periods ended March 31, 1997 or 1996; however, as of March 31, 1997, the
Company has entered into $6.7 million of commitments to build a new home office
facility in Okemos, Michigan and to purchase new  furniture and equipment.  It
was originally estimated that the cost to construct and furnish the new home
office facility would be $5.5 million.  This amount was subsequently increased
by $1.2 million to reflect more current construction cost estimates.  As of
March 31, 1997, no other material commitments for capital expenditures existed,
and management believes the Company's present liquidity, together with its
expected cash flow from operations, will be sufficient to fund these
commitments for capital expenditures.

     In April 1997, the Company signed an agreement with Michigan Educational
Employees Mutual Insurance Company, a Michigan-domiciled specialty writer of
personal automobile and homeowners coverages for teachers and other members of
the educational community in Michigan.  Concurrent with this transaction,
Professionals Group obtained $22.5 million in proceeds from a seven-year
unsecured term loan from a bank.  See Item 5 - Other Information herein for
further discussion of these transactions.


                                      -11-



<PAGE>   12



Effects of New Accounting Pronouncements:

     The Financial Accounting Standards Board has issued Statement of Financial
Accounting Standards No. 128 "Earnings Per Share" ("SFAS No. 128") which is
effective for financial statements issued for both interim and annual periods
ending after December 15, 1997.  Earlier application is not permitted.  This
standard replaces the presentation of primary earnings per share with a
presentation of basic earnings per share and also requires dual presentation of
basic and  diluted earnings per share for all entities with complex capital
structures.  Because early adoption of SFAS No. 128 is not permitted, there is
no impact on the Company's earnings per share amounts for the interim periods
presented herein.  However, upon adoption in the fourth quarter of 1997, all
prior interim and annual period earnings per share data presented will be
restated to conform with the provisions of SFAS No. 128.  The Company does not
expect the impact of the adoption of SFAS No. 128 to be material to previously
reported earnings per share amounts.


PART II.  OTHER INFORMATION

Item 5. Other Information

     In April 1997, the Company completed an agreement with Michigan Educational
Employees Mutual Insurance Company ("MEEMIC"), a Michigan-domiciled specialty
writer of personal automobile and homeowners coverages for teachers and other
members of the educational community in Michigan.  Pursuant to the agreement
and based on the approvals of the Michigan Commissioner of Insurance:  (i)
PICOM purchased a twelve-year, $21.5 million surplus note from MEEMIC, bearing
interest at 8.5% per annum (the "Surplus Note"); (ii) effective July 1, 1997,
PICOM will reinsure approximately 40% of MEEMIC's net premiums (this is
projected to increase PICOM's gross written premiums by approximately $35.0
million on an annualized basis); (iii) Professionals Group will provide MEEMIC
with information systems services and certain consulting services pursuant to a
ten-year management services agreement; and (iv) nominees of Professionals
Group have been elected to all positions on the Board of Directors of MEEMIC.

     Concurrent with the above transaction, Professionals Group obtained $22.5
million in proceeds from a seven-year unsecured bank term loan, bearing
interest at LIBOR plus 75 basis points, and payable monthly (the "Credit
Agreement").  Principal payments are due on April 30, as follows:  1998 -
$2,500,000; 1999 - $2,500,000; 2000 - $3,000,000; 2001 - $3,000,000; 2002 -
$3,500,000; 2003 - $3,500,000; and 2004 - $4,500,000.  Professionals Group used
$20.0 million of the proceeds received from this loan to make a capital
contribution to PICOM, which in turn, purchased the Surplus Note from MEEMIC.

     The Credit Agreement contains a covenant which prohibits the payment of
cash dividends on Professionals Group's common stock (except for cash paid in
lieu of fractional shares related to stock dividends declared).   Additional
covenants also require the Company to maintain total consolidated shareholders'
equity of at least $80.0 million plus 50% of the preceding fiscal year's
consolidated net income, maintain a ratio of debt to equity of not more than
0.5:1 and maintain a fixed charges coverage ratio and an interest coverage ratio
(as defined by the Credit Agreement) of not less than 1.5:1 and 2.5:1,
respectively.

                                      -12-



<PAGE>   13



     The Company has also agreed to assist MEEMIC in acquiring the net assets
of Michigan Educators Insurance Agency, Inc. ("MEIA").  MEIA is an insurance
agency that has the exclusive right to distribute MEEMIC insurance products.
Upon its purchase, MEIA's marketing and sales functions shall be consolidated
with MEEMIC's.  To fund this purchase, MEEMIC shall utilize the proceeds of the
Surplus Note, plus a $20.0 million promissory note to be issued by a subsidiary
of MEEMIC, which will be guaranteed by Professionals Group.  Additionally,
Professionals Group shall issue warrants for 275,000 shares of its common stock
to MEIA shareholders.  MEEMIC's acquisition of MEIA is subject to regulatory
approval by the Michigan Commissioner of Insurance.

     At a future date, Professionals Group and MEEMIC expect to pursue
demutualization of MEEMIC.  Such demutualization would be subject to regulatory
approval by the Michigan Commissioner of Insurance and approval of MEEMIC's
policyholders.  No specific timetable has been set for this proposed
demutualization and there can be no assurances that MEEMIC will be
demutualized.

Item 6.  Exhibits and Reports on Form 8-K

      (a)  Exhibits.

    Item 601
 Regulation S-K
Exhibit Reference
     Number        Exhibit Description
-----------------  -------------------
      (10)(a)      Credit agreement dated April 4, 1997 for $22.5 million
                   between registrant and LaSalle National Bank.*
        (11)       No statement re: computation of per share earnings is
                   required to be filed because the computations can be clearly
                   determined from the materials contained herein.
        (27)       Financial Data Schedule of registrant.*

* Filed herewith.

      (b)  Reports on Form 8-K.


     None.
                                      -13-



<PAGE>   14


     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.

                                     PROFESSIONALS INSURANCE COMPANY
                                     MANAGEMENT GROUP


DATE:  May 12, 1997                  /s/ R. Kevin Clinton
                                     ---------------------------
                                     R. Kevin Clinton
                                     Vice President, Treasurer,
                                     Chief Financial Officer and
                                     Chief Accounting Officer







                                      -14-

<PAGE>   15
                                EXHIBIT INDEX


Exhibit Reference
    Number              Exhibit Description
-----------------       -------------------

     (10)(a)            Credit agreement dated April 4, 1997 for $22.5 million
                        between registrant and LaSalle National Bank.

     (27)               Financial Data Schedule of registrant.