UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-Q

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

                For The Quarterly Period Ended September 30, 1997

                        Commission File Number: 000-24366

                               GORAN CAPITAL INC.
             (Exact name of registrant as specified in its charter)

CANADA                                                          Not Applicable
(State or other jurisdiction of                               (I.R.S. Employer
incorporation or organization)                             Identification No.)

                              181 University Avenue
                               Box 11, Suite 1101
                            Toronto, Ontario M5H 3M7

                               4720 Kingsway Drive
                           Indianapolis, Indiana 46205
                    (Address of Principal Executive Offices)

Registrant's telephone number, including area code:  (416) 594-1155 (Canada)
                                                     (317) 259-6400 (U.S.)

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 November 12, 1997,  there were  5,570,277  shares of  Registrant's  common
stock issued and outstanding exclusive of shares held by Registrant.




<PAGE>



                                 Form 10-Q Index
                               September 30, 1997
                                      Page
                                     Number

PART 1  FINANCIAL INFORMATION

Item 1  Financial Statements...........................................      3

        Consolidated Financial Statements:
        Consolidated Balance Sheets at September 30, 1997 and
           December 31, 1996...........................................      4

        Consolidated Statements of Earnings for the Three
        and Nine Months Ended September 30, 1997 and 1996..............      5

        Consolidated Statements of Changes in Cash Resources
        for the Nine Months Ended September 30, 1997 and 1996..........      7

        Consolidated Statements of Shareholders' Equity................      8

        Notes to Consolidated Financial Statements.....................      9

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

PART 2  OTHER INFORMATION..............................................     23

SIGNATURES.............................................................     23


<PAGE>



GORAN CAPITAL INC.
PART 1     FINANCIAL INFORMATION

Item 1     Financial Statements

In the opinion of management, the financial information reflects all adjustments
(consisting only of normal recurring adjustments) which are necessary for a fair
presentation of the financial position, results of operations and cash flows for
the interim  periods.  The results for the three and nine months ended September
30, 1997 and 1996 are not  necessarily  indicative of the results to be expected
for the entire year.

These quarterly interim financial statements are unaudited and are stated in
U.S. dollars.

                                      -3-

<PAGE>



GORAN CAPITAL INC.
CONSOLIDATED BALANCE SHEETS
(Canadian GAAP, stated in U.S. Dollars)


                                          September 30,     December 31,
                                              1997             1996

ASSETS
Cash and Investments                      $252,929,916     $206,670,797
Accounts Receivable
  Premiums Receivable                      162,913,234       63,873,697
  Due From Insurance Companies              19,732,267       33,905,128
  Due From Associated Companies                450,216          140,423
  Accrued and Other Receivables              5,266,410        3,329,893
                                             ---------        ---------
                                           188,362,127      101,249,141
Reinsurance recoverable on outstanding
claims                                     150,887,102       33,112,946
Prepaid reinsurance premiums                34,363,628       14,983,097
Capital Assets                              11,187,031        4,801,086
Deferred Policy Acquisition Costs           12,973,105       13,859,492
Intangibles                                 41,254,096        1,329,736
Other Assets                                 4,144,386        5,335,477
                                            ----------        ---------

Total Assets                              $696,101,391     $381,341,772
                                          ============     ============

LIABILITIES
Accounts Payable
  Due to Insurance Companies              $111,752,271       $5,754,831
  Accrued and Other Payables                19,968,697       21,050,919
                                            ----------       ----------
                                           131,720,968       26,805,751
Outstanding Claims                         219,286,169      127,044,804
Unearned Premiums                          119,647,918       91,206,974
Bank Loans                                   6,206,475       48,000,000
                                             ---------       ----------
Total Liabilities                          476,861,530      293,057,529
                                           -----------      -----------
Minority Interest:
  Preferred Securities                     135,000,000              ---
                                           -----------              ---
  Equity in net assets of subsidiary        25,397,434       41,026,354
                                            ----------       ----------
SHAREHOLDERS' EQUITY
Capital Stock                               17,459,640       17,416,431
Contributed Surplus                          2,774,606        2,774,606
Retained Earnings                           38,866,028       27,401,236
Cumulative Translation Adjustment            (257,847)        (334,384)
                                             ---------        ---------
Total Shareholders' Equity                 $58,842,427      $47,257,890
                                           -----------      -----------

Total Liabilities and Shareholders'       $696,101,391     $381,341,772
                                          ============     ============
Equity


See Notes to Consolidated Financial Statements

                                      -4-

<PAGE>



GORAN CAPITAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Canadian GAAP, stated in U.S. Dollars)
                                           For the three months ending
                                          September 30,   September 30,
                                              1997            1996

Gross Premiums Written                     $102,845,354    $71,812,920
                                           ============    ===========
Net Premiums Earned                         $76,474,256    $71,795,680
Fee Income                                    4,198,852      1,608,006
Net Investment Income/Net Realized
Gains and Losses                              7,364,082      1,320,245
                                              ---------      ---------
   Total Revenues                            88,037,190     74,723,931
                                             ----------     ----------
Net Claims Incurred                          57,159,387     49,684,080
General and Administrative Expenses          18,693,909     14,987,813
Amortization of Intangibles                     393,536        210,695
Interest Expense                                539,579      1,715,689
                                                -------      ---------
   Total Expenses                            76,786,411     66,598,277
                                             ----------     ----------
Income Before Undernoted Items               11,250,779      8,125,654
Provision for Income Taxes                    3,855,449      3,132,898
Distributions on Preferred Securities           686,716            ---
Equity in earnings of subsidiary              2,586,334        833,133
                                              ---------        -------
   Net Earnings                              $4,122,280     $4,159,623
                                             ==========     ==========
   Earnings Per Share - Basic                     $0.74          $0.79
                                                  =====          =====
   Earnings Per Share - Fully Diluted             $0.69          $0.72
                                                  =====          =====

See Notes to Consolidated Financial Statements


                                      -5-

<PAGE>



GORAN CAPITAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(Canadian GAAP, stated in U.S. Dollars)


                                          For the Nine Months Ending

                                         September 30,     September 30,
                                              1997             1996


Gross Premiums Written                   $382,984,164     $222,096,120
                                         ============     ============
Net Premiums Earned                       219,239,586     $147,386,503
Fee Income                                 14,990,166        5,670,009
Net Investment Income/Net Realized
Gains and Losses                           15,955,348        4,321,263
                                           ----------        ---------
   Total Revenues                         250,185,100      157,377,775
                                          -----------      -----------
Net Claims Incurred                       164,703,777      106,232,444
General and Administrative Expenses        52,264,556       31,743,755
Amortization of Intangibles                   687,021          210,695
Interest Expense                            2,990,990        3,454,332
                                            ---------        ---------
   Total Expenses                         220,646,344      141,641,226
                                          -----------      -----------
Income Before Undernoted Items             29,538,756       15,736,549
Provision for Income Taxes                 10,077,930        4,962,319
Distributions on Preferred Securities         686,716              ---
Equity in earnings of subsidiary            7,309,318        1,231,509
                                            ---------        ---------
   Net Earnings                           $11,464,792       $9,542,721
                                          ===========       ==========

   Earnings Per Share - Basic                   $2.06            $1.83
                                                =====            =====
   Earnings Per Share - Fully Diluted           $1.95            $1.69
                                                =====            =====
Weighted Average Shares Outstanding:
   Primary                                  5,552,097        5,226,707
                                            =========        =========
   Fully Diluted                            6,285,245        5,712,159
                                            =========        =========


See Notes to Consolidated Financial Statements

                                      -6-

<PAGE>



GORAN CAPITAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN
CASH RESOURCES FOR THE NINE MONTHS ENDING
(Canadian GAAP, stated in U.S. Dollars)

                                               September 30,     September 30,
                                                    1997             1996

CASH PROVIDED BY OPERATING ACTIVITIES
Net Earnings For The Period                      $11,464,792        $9,542,721
Items Not Affecting Cash Resources:
  Amortization                                     1,192,000           286,124
  Loss (Gain) on Disposal of Investments         (5,465,000)           388,058
  Minority Interest in Net Income of
  Consolidated Subsidiary                          7,137,718         1,231,509
Net changes in operating assets and
liabilities:
  Decrease (Increase) in Other Assets          (136,510,781)       (1,215,223)
  Decrease (Increase) in Deferred Policy
  Acquisition Costs                                  762,033         1,633,676
  Increase(Decrease) in Deferred Income
  Taxes                                                  ---            55,058
  Increase (Decrease) in Unearned Premiums        29,259,299       (7,190,451)
  Increase (Decrease) in Outstanding Losses       93,384,459         (535,678)
  Decrease (Increase) in Accounts Receivable    (88,021,444)         4,637,359
  Increase (Decrease) in Accounts Payable        105,152,548         2,389,128
                                                 -----------         ---------
  Net Cash provided by Operations                 18,355,624        11,222,281
                                                  ----------        ----------
INVESTING ACTIVITIES:
  Net Purchase of Marketable Securities         (49,912,503)      (15,043,179)
  Acquisition of Subsidiary                     (61,000,000)      (63,228,000)
  Other Investing Activities                          30,243               ---
  Net Purchase of Capital Assets                 (3,807,023)         (865,608)
                                                 -----------         ---------
  Net Cash Used by Investing Activities        (114,689,283)      (79,136,787)
                                               -------------      ------------

FINANCING ACTIVITIES:
  Issue of Preferred Securities                  130,100,000               ---
  Increase (Reduction) of Borrowed Funds        (41,362,845)        57,676,203
  Increase (Decrease) in Minority Interest         2,474,099        18,319,390
  Issue of Share Capital                             199,478           445,035
                                                     -------           -------
  Net Cash Provided by Financing Activities       91,410,732       $76,440,628
                                                  ----------       -----------
Change in Cash Resources During the Period       (4,922,927)         8,526,122
Cash Resources, Beginning of Period               33,730,582        10,613,027
                                                  ----------        ----------
Cash Resources, End of Period                    $28,807,655       $19,139,149
                                                 ===========       ===========
Cash Resources are Comprised of:
  Cash                                            $9,972,091        $6,369,897
  Short-Term Investments                          18,835,564        12,769,252
                                                  ----------        ----------
  Sub-total                                      $28,807,655       $19,139,149
                                                 ===========       ===========

See Notes to Consolidated Financial Statements

                                      -7-

<PAGE>
<TABLE>
<CAPTION>

GORAN CAPITAL, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Canadian GAAP, stated in U.S. Dollars)

<S>                            <C>             <C>          <C>              <C>            <C>    

                                   Common      Contributed   Cumulative        Retained        Total
                                    Stock       Surplus      Translation       Earnings     Stockholders'
                                                             Adjustment        (Deficit)       Equity

Balance at December 31, 1995   $16,874,923             --    $(357,777)      $(3,895,014)    $12,622,132
Issuance of common shares          482,199             --            --                --        482,199
Increase in Contributed Surplus        ---      3,081,000           ---               ---      3,081,000
Change in cumulative
translation adjustment                  --             --      (40,757)                --       (40,757)
Net Earnings                            --             --            --         9,542,721      9,542,721
                                           
Balance at September 30, 1996  $17,357,122     $3,081,000    $(398,534)        $5,647,707    $25,687,295
                               ===========     ==========    ==========        ==========    ===========

Issuance of common shares           59,309             --            --                --         59,309
Change in contributed surplus           --      (306,394)            --                --       (306,394)
Change in cumulative
transaction adjustment                  --             --        64,151                           64,151
Net earnings                            --             --            --        21,753,259     21,753,259
Balance at December 30, 1996    17,416,431      2,774,606     (334,383)        27,401,236     47,257,890
Issuance of common shares           43,209             --            --                --         43,209
Change in contributed surplus           --             --            --                --             --
Change in cumulative
translation adjustment                  --             --        76,536                --         76,536
Net earnings                            --             --            --        11,464,792     11,464,792
                        
Balance at September 30, 1997  $17,459,640     $2,774,606    $(257,847)       $38,866,028    $58,842,427
                               ===========     ==========    ==========       ===========    ===========

See Notes to Consolidated Financial Statements

                                      -8-
</TABLE>

<PAGE>



                               GORAN CAPITAL INC.
            CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
             For The Three and Nine Months Ended September 30, 1997

NOTE 1 - BASIS OF PRESENTATION

The  foregoing   consolidated  condensed  financial  statements  are  unaudited.
However,  in the opinion of  management,  all  adjustments  necessary for a fair
presentation of the results of the interim period  presented have been included.
All  adjustments are of a normal and recurring  nature.  Results for any interim
period are not  necessarily  indicative  of results to be expected for the year.
The consolidated financial statements include the accounts of Goran Capital Inc.
("Goran" and the "Company") and its 67% owned subsidiary,  Symons  International
Group,  Inc. ("SIG") and its wholly-owned  subsidiaries,  IGF Insurance  Company
("IGF"),  Pafco  General  Insurance  Company  ("Pafco")  and Superior  Insurance
Company   ("Superior")),   and  Goran's   wholly-owned   subsidiaries,   Granite
Reinsurance  Company Ltd.,  Granite Insurance  Company and Symons  International
Group - Florida.  Prior to August 12, 1997, Pafco and Superior were 52% owned by
SIG. The consolidated  condensed interim financial statements have been prepared
in accordance with Article of Regulation S-X and, therefore,  do not include all
information and footnotes normally shown in full annual financial statements.

These unaudited  consolidated  condensed financial statements have been prepared
by the Company in accordance with accounting  principles  generally  accepted in
Canada ("CDN GAAP"). These principles also conform in all material respects with
accounting principles generally accepted in the United States ("US GAAP") except
as disclosed in Note 5. All material intercompany amounts have been eliminated.

NOTE 2 - REINSURANCE

In order to reduce risk and  increase  its  underwriting  capacity,  the Company
purchases reinsurance.  Reinsurance does not relieve the Company of its ultimate
liability  to its  insureds  for the risks  ceded to  reinsurers.  As such,  the
Company is  subject to credit  risk with  respect to risks  ceded to  reinsurers
should a reinsurer  fail.  Effective  January 1, 1996  reinsurance was placed as
follows:  For the  nonstandard  automobile  segment,  the Company only purchases
excess  of loss and  catastrophic  protections  which  result in  minimum  ceded
premium in  proportion  to gross written  premiums.  For the crop  segment,  the
Company reinsures to the Federal Crop Insurance  Corporation ("FCIC"), an agency
of the United States  Department of  Agriculture,  all of its  Multi-Peril  Crop
Insurance ("MPCI") business which has an underwriting gain or loss feature.  The
Company reinsures stop-loss protection to third party reinsurers on its MPCI and
crop hail business.  Regarding the crop hail line of business,  the Company also
carries an excess of loss (stop-loss)  protection,  with third party reinsurers.
Effective  January  1,  1997,  the  Company  ceded  20% of its new  and  renewal
nonstandard  automobile  business,  40% of its crop hail business and 50% of its
crop  hail  business  under  certain  quota  share  arrangements.   Third  party
reinsurers receive 90% of the ceded non-standard  automobile  business.  Granite
Reinsurance  Company  Ltd.  is a  participant  in the auto quota  share  treaty,
receiving 10% of the ceded nonstandard automobile business. Effective October 1,
1997,  the automobile 20% quota share treaty was reduced to 10% due to increased
surplus and capital at Pafco and Superior.  Granite  Reinsurance Company Ltd. is
also a participant in the stop-loss protection on MPCI and crop hail business.

The effects of reinsurance are as follows:

                                      -9-

<PAGE>



NOTE 2 (continued)
GORAN CAPITAL INC.
Analysis of Effects of Reinsurance
(Canadian GAAP, stated in U.S. Dollars)


                               For The Three Months Ended
                           September 30,         September 30,
                              1997                 1996
Premiums Written
  Gross                   $102,845,354           $71,812,920
  Ceded                   (31,927,349)           (4,251,610)
                          ------------           -----------
  Net                      $70,918,005           $67,561,310
                           ===========           ===========
Premiums Earned
  Gross                   $141,968,658           $89,850,429
  Ceded                   (65,494,402)          (18,054,749)
                          ------------          ------------
  Net                      $76,474,256           $71,795,680
                           ===========           ===========
Claims Incurred
  Gross                   $150,716,971           $61,831,599
  Ceded                   (93,557,584)          (12,147,519)
                          ------------          ------------
  Net                      $57,159,387           $49,684,080
                           ===========           ===========



                            For the Nine Months Ended
                          September 30,    September 30,
                             1997              1996
Premiums Written
  Gross                 $382,984,164       $222,096,120
  Ceded                (154,684,164)       (71,430,757)
                       -------------       ------------
  Net                   $228,300,000       $150,665,363
                        ============       ============
Premiums Earned
  Gross                 $354,330,948       $233,152,905
  Ceded                (135,091,362)       (85,766,402)
                       -------------       ------------
  Net                   $219,239,586       $147,386,503
                        ============       ============
Claims Incurred
  Gross                 $309,514,681       $140,268,840
  Ceded                (144,810,904)       (34,036,396)
                       -------------       ------------
  Net                   $164,703,777       $106,232,444
                        ============       ============


                       September 30,         December 31,
                          1997                 1996
Unearned Premiums
  Gross               $119,647,918          $ 91,206,974
  Ceded               (34,363,489)          (14,983,097)
                      ------------          ------------
  Net                  $85,284,429          $ 76,223,877
                       ===========          ============
Outstanding Claims
  Gross               $219,286,169          $127,044,804
  Ceded                (83,952,154)          (33,112,946)
                      ------------          ------------
  Net                 $135,334,016          $ 93,931,858
                      ============          ============



                                      -10-

<PAGE>



NOTE 3 - CONTINGENT LIABILITY

The Company and its  subsidiaries,  are named as defendants in various  lawsuits
relating to their business. Legal actions arise from claims made under insurance
policies  issued by the  subsidiaries.  These  actions  were  considered  by the
Company  in  establishing  its loss  reserves.  The  Company  believes  that the
ultimate  disposition of these lawsuits will not materially affect the Company's
operations or financial position.

IGF  instituted  litigation  against  the FCIC on March 23,  1995 in the  United
States District Court for the Southern  District of Iowa seeking $4.3 Million as
reimbursement  for certain  expenses.  IGF alleges the FCIC wrongfully sought to
hold  IGF  responsible  for  these  expenses.   The  FCIC   counterclaimed   for
approximately $1.2 Million in claims payments for which the FCIC contends IGF is
responsible  for as successor  to the run-off  book of business.  On October 27,
1997,  IGF  reached an  agreement  with the FCIC to settle  the case,  with both
parties  dismissing  all claims  against one another  which were  subject to the
litigation. The FCIC has agreed to pay IGF a lump sum payment of $60,000.

NOTE 4 - CAPITAL STOCK

For the three and nine months ended  September  30,  1997, 0 and 164,457  common
shares  were issued by the Company  pursuant  to warrants  previously  issued to
debenture  holders and pursuant to an established  Company Employee Stock Option
Plan.

NOTE 5 - UNITED STATES ACCOUNTING PRINCIPLES

These  unaudited   consolidated  financial  statements  have  been  prepared  in
accordance  with CDN GAAP.  The  difference  between CDN GAAP and US GAAP are as
follows:

                                            For The Three Months Ended
                                     September 30,               September 30,
                                          1997                        1996
Reported Net Earnings                  $4,122,280                  $4,159,623
US/Canada GAAP Differences
  Discounting on Outstanding Claims         (116)
  Deferred Income Taxes                       ---                     472,266
                                              ---                     -------
Revised Net Earnings                   $4,122,164                  $4,631,889
                                       ==========                  ==========
Earnings Per Share                          $0.63                       $0.81
EPS - Before Extraordinary Items            $0.63                       $0.81
EPS - Fully Diluted                         $0.63                       $0.81
Dividends Per Share                           ---                         ---


                                      -11-

<PAGE>




                                           For The Nine Months Ended
                                         September 30,    September 30,
                                              1997             1996

Reported Net Earnings                      $11,464,792       $9,542,721
US/Canada GAAP Differences
  Discounting on Outstanding Claims             37,777              ---
  Deferred Income Taxes                            ---        (164,960)
                                                   ---        ---------
Revised Net Earnings                       $11,502,568       $9,377,761
                                           ===========       ==========

Earnings Per Share                               $1.87            $1.66
EPS - Before Extraordinary Items                 $1.87            $1.66
EPS - Fully Diluted                              $1.87            $1.66
Dividends Per Share                                ---              ---

Reported Total Assets                     $696,101,391     $387,886,110
US/Canada GAAP Differences
  Loans to Purchase Shares                   (587,554)        (564,528)
  Deferred Income Taxes                      2,128,086        2,737,000
  Unrealized Gain (Loss) on Investments      5,890,746           95,398
                                             ---------           ------
Revised Total Assets                      $703,532,669     $390,153,980
                                           ============    ============

Reported Shareholders' Equity              $58,842,427      $25,687,295
US/Canada GAAP Differences
  Deferred Income Taxes                     2,128,086         2,737,000
  Discounting on Claims                   (1,212,012)        (1,330,201)
  Loans to Purchase Shares                  (587,554)          (564,528)
  Unrealized Gain (Loss) on Investments     5,890,746            95,398
                                            ---------            ------
Revised Shareholders' Equity              $65,061,693       $26,624,963
                                          ===========       ===========



                                      -12-

<PAGE>




NOTE 6 - PREFERRED SECURITY OFFERING

On August 12,  1997,  SIG issued  $135  million  in Trust  Originated  Preferred
Securities  ("Preferred  Securities").  These Preferred  Securities were offered
through  a  wholly-owned  trust  subsidiary  of SIG and  are  backed  by  Senior
Subordinated  Notes to the  Trust  from SIG.  These  Preferred  Securities  were
offered  under  Rule  144A  of  the  SEC  ("Offering")   and,  pursuant  to  the
Registration  Rights  Agreement  executed  at  closing.  SIG  filed  a Form  S-4
Registration Statement with the SEC on September 16, 1997 to effect the Exchange
Offer.  The S-4 Registration  Statement was declared  effective on September 30,
1997 and the  Exchange  Offer  successfully  closed on  October  31,  1997.  The
proceeds of the Offering were used to repurchase the remaining minority interest
in GGSH for $61 million,  repay the balance of the GGS Senior Credit Facility of
$44.9 million and,  pursuant to the Registration  Rights  Agreement  executed at
closing, SIG expects to contribute the balance, after expenses, of approximately
$24 million to the  nonstandard  automobile  insurers of which $10.5 million was
contributed  in the third  quarter.  Expenses  of the issue will  aggregate  4.9
million and will be  amortized  over the term of the  Preferred  Securities  (30
years). In the third quarter,  the Company  wrote-off the remaining  unamortized
costs of the GGS Senior Credit Facility of approximately $1.4 million pre-tax or
approximately $0.11 per share.

The  excess  of the  acquisition  price  over the  minority  interest  liability
aggregated  approximately  $ 37,896,000 and was assigned to goodwill as the fair
market value of acquired assets  approximating  their carrying  value.  Goodwill
will be  amortized  over 25  years  to match  management's  expectations  of the
expected benefit period.

The  Preferred  Securities  have a term of 30 years  with  semi-annual  interest
payments commencing February 15, 1997 at 9.50%. The Preferred  Securities may be
redeemed in whole or in part after 10 years.

SIG shall  not,  and shall not  permit  any  subsidiary,  to incur  directly  or
indirectly,  any indebtedness  unless, on the date of such Incurrence (and after
giving effect thereto),  the  Consolidated  Coverage Ratio exceeds 2.5 to 1. The
Coverage Ratio is the aggregate of net earnings,  plus interest expense,  income
taxes,  depreciation,  and amortization divided by interest expense for the same
period.

Assuming  this offering  took place at January 1, 1997,  the proforma  effect of
this offering on the Company's  consolidated  statement of earnings for the nine
months ended is as follows:

                                    September 30, 1997
                                        Unaudited

Revenues                              $ 250,185,000
Net earnings                          $   9,512,000
Net earnings per common share                $ 1.71



                                      -13-

<PAGE>



The aforementioned  proforma results do not include the effects of the write-off
of the debt  issuance  cost recorded in the third  quarter.  The  aforementioned
proforma  amounts are dilutive because of the additional  reserve  adjustment to
the non-standard  auto operations in the second quarter and the non-inclusion of
investment  income on the  additional  proceeds from the  offering.  The Company
expects based on projected  premium  volumes and results of  operations  for the
non-standard  division  that this  transaction  will be accretive to earnings in
future years.

ITEM 2  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
        OF OPERATIONS OF THE COMPANY

The Company  underwrites and markets  nonstandard  private passenger  automobile
insurance and crop insurance.

Nonstandard Automobile Insurance Operations

Symons International  Group, Inc., through its wholly owned subsidiaries,  Pafco
and  Superior,  is engaged in the writing of  insurance  coverage on  automobile
physical  damage and liability  policies for  "nonstandard  risks".  Nonstandard
insureds  are those  individuals  who are  unable to obtain  insurance  coverage
through  standard  market  carriers due to factors such as poor premium  payment
history,  driving  experience,  record of prior accidents or driving violations,
particular  occupation or type of vehicle.  The Company offers several different
policies  which are  directed  towards  different  classes  of risk  within  the
nonstandard  market.  Premium  rates for  nonstandard  risks are higher than for
standard  risks.  Since it can be viewed as a residual  market,  the size of the
nonstandard  private  passenger  automobile  insurance  market  changes with the
insurance  environment  and  grows  when  the  standard  coverage  becomes  more
restrictive.  Nonstandard  policies have relatively short policy periods and low
limits of liability.  Due to the low limits of coverage, the period of time that
elapses  between the  occurrence  and  settlement  of losses  under  nonstandard
policies  is  shorter  than  many  other  types of  insurance.  Also,  since the
nonstandard  automobile insurance business typically  experiences lower rates of
retention than standard  automobile  insurance,  the number of new policyholders
underwritten  by  nonstandard   automobile   insurance  carriers  each  year  is
substantially  greater  than the  number of new  policyholders  underwritten  by
standard carriers.

The Company follows the customary  industry  practice of reinsuring a portion of
its risks and paying for that  protection  based upon  premiums  received on all
policies subject to such reinsurance.  As part of its internal  procedures,  the
Company evaluates the financial  condition of each prospective  reinsurer before
it  cedes  business  to that  carrier.  Based  on the  Company's  review  of its
reinsurers'  financial health and reputation in the insurance  marketplace,  the
Company  believes its reinsurers are financially  sound and therefore,  can meet
their obligations to the Company under the terms of the reinsurance treaties.

Crop Insurance Operations

The two  principal  components  of the  Company's  crop  insurance  business are
Multi-Peril Crop Insurance ("MPCI") and private named peril, primarily crop hail
insurance.  The majority of the Company's  crop insurance  business  consists of
MPCI.  Crop  insurance  is  purchased by farmers to reduce the risk of crop loss
from  adverse  weather  and other  uncontrollable  events.  Farms are subject to
drought,  floods and other  natural  disasters  that can cause  widespread  crop
losses and, in severe cases,  force farmers out of business.  Historically,  one
out of every twelve acres planted by farmers has not been  harvested  because of
adverse weather or other natural disasters.  Because many farmers rely on credit
to finance  their  purchases of such  agricultural  inputs as seed,  fertilizer,
machinery  and fuel,  the loss of a crop to a natural  disaster can reduce their
ability to repay  these loans and to find  sources of funding for the  following
year's operating expenses.


                                      -14-

<PAGE>



The Company,  like other  private  insurers  participating  in the MPCI program,
generates revenues from the MPCI program in two ways. First, it markets,  issues
and administers policies, for which it receives administrative fees; and second,
it  participates in a  profit-sharing  arrangement in which it receives from the
government a portion of the aggregate profit, or pays a portion of the aggregate
loss,  in respect of the  business it writes.  The Company  writes MPCI and crop
hail insurance through approximately 1,300 independent agencies in 40 states.

MPCI is a  government-sponsored  program with accounting treatment which differs
in certain  respects from the more traditional  property and casualty  insurance
lines.  For  income  statement  purposes  under  Generally  Accepted  Accounting
Principles  (GAAP),  Gross Premiums  Written consist of the aggregate  amount of
MPCI premiums paid by farmers for "Buy-up  Coverage" (MPCI coverage in excess of
CAT Coverage),  and any related  federal premium  subsidies,  but do not include
MPCI premium on CAT Coverage (the minimum available level of MPCI Coverage).  By
contrast,  Net Premiums Written does not include any MPCI Premiums or subsidies,
all of which are deemed to be ceded to the FCIC as a  reinsurer.  The  Company's
profit or loss from its MPCI business is  determined  after the crop season ends
on the basis of a complex  profit  sharing  formula  established  by law and the
FCIC. For GAAP income statement purposes, any such profit or loss sharing earned
or payable by the Company is treated as an adjustment to commission  expense and
is included in policy acquisition and general and administrative expenses.

The Company also  receives  from the FCIC (i) an expense  reimbursement  payment
equal to a percentage of Gross Premiums  Written for each Buy-up Coverage policy
it writes ("Buy-Up Expense  Reimbursement  Payment"),  (ii) an LAE Reimbursement
Payment equal to 13.0% of MPCI Imputed  Premiums for each CAT Coverage policy it
writes  (the "CAT LAE  Reimbursement  Payment"),  and (iii) a small  excess  LAE
reimbursement  payment of two hundredths of one percent (.02%) of MPCI Retention
(as defined  herein) to the extent the Company's MPCI Loss Ratios on a per state
basis exceed certain levels (the "MPCI Excess LAE Reimbursement  Payment").  For
1998,  1997 and 1996, the Buy-up Expense  Reimbursement  Payment has been set at
27%, 29% and 31%,  respectively,  of the MPCI Premium. For GAAP income statement
purposes,  the Buy-up Expense Reimbursement Payment is treated as a contribution
to income and reflected as an offset against policy  acquisition and general and
administrative  expenses.  The CAT LAE Reimbursement Payment and the MPCI Excess
LAE  Reimbursement  Payment are, for income statement  purposes,  recorded as an
offset  against  LAE, up to the actual  amount of LAE incurred by the Company in
respect of such policies,  and the remainder of the payment, if any, is recorded
as other income.

On June 9, 1997,  the  Secretary of  Agriculture  announced  that the USDA would
transfer  to the  private  sector CAT  coverage.  At this time,  the Company has
received  approximately  17,000  policies  that were  formerly  written  by USDA
offices,  although  there can be no assurance that the Company will receive this
number of policies.  Based on historical FSA CAT transfer  per-policy  averages,
the Company has  preliminarily  estimated that it will receive  approximately an
additional $2 to $3 million in premiums from such transferred policies, however,
there can be no  assurance  that this number  will be  realized.  This  estimate
assumes that IGF will retain 100% of such premiums.

In addition to MPCI, the Company offers stand alone crop hail  insurance,  which
insures  growing  crops  against  damage  resulting  from hail  storms and which
involves no federal  participation,  as well as its  proprietary  product  which
combines the application and  underwriting  process for MPCI and hail coverages.
This  product  tends to produce less  volatile  loss ratios than the stand alone
product since the combined product  generally insures a greater number of acres,
thereby  spreading the risk of damage over a larger insured area.  Approximately
half of the  Company's  hail  policies  are  written in  combination  with MPCI.
Although  both crop hail and MPCI provide  coverage  against hail damage,  under
crop hail coverages farmers can receive payments for hail damage which would not
be severe enough to require a payment under an MPCI policy. The Company believes
that  offering  crop hail  insurance  enables it to sell more  policies  than it
otherwise would.

                                      -15-

<PAGE>



In  addition  to crop  hail  insurance,  the  Company  also  sells  Named  Peril
Coverages.  These products  cover  specific  crops and are generally  written on
terms that are  specific to the kind of crop and farming  practice  involved and
the amount of actuarial  data  available.  The Company  plans to seek  potential
growth  opportunities  in this niche market by  developing  basic  policies on a
diverse  number of named  crops  grown in a variety of  geographic  areas and to
offer these policies primarily to large producers through certain select agents.

In order to reduce the Company's potential loss exposure under the MPCI program,
in  addition  to  Reinsurance  obtained  from the FCIC,  the  Company  purchases
stop-loss  Reinsurance from other private  insurers.  Such Reinsurance would not
eliminate the Company's  potential liability in the event a reinsurer was unable
to pay or losses  exceeded the limits of the stop-loss  coverage.  For crop hail
insurance,  the Company protects itself with quota share Reinsurance and various
layers of stop-loss Reinsurance.  Based on a review of the reinsurers' financial
health and reputation in the insurance  marketplace,  the Company  believes that
the reinsurers for its crop insurance  business are  financially  sound and that
they therefore can meet their  obligations to the Company under the terms of the
Reinsurance treaties.

Certain other  conditions of the Company's crop business may effect  comparisons
of the  Company's  results and  operating  ratios  with that of other  insurers,
including: (i) the seasonal nature of the business whereby profits are generally
recognized  predominantly  in the second half of the year,  (ii) the  short-term
nature of crop business whereby losses are known within a short time period, and
(iii) the limited amount of investment income associated with crop business.  In
addition,  cash flows from the crop business differ from cash flows from certain
more traditional lines.

In 1996, the Company instituted a policy of recognizing (i) 35% of its estimated
MPCI Gross Premiums Written for each of the first and second  quarters,  20% for
the third quarter and 10% for the fourth quarter (all winter wheat type policies
are recognized in the fourth quarter),  (ii) commission expense at a rate of 16%
of MPCI Gross Premiums Written recognized and (iii) Buy-up Expense Reimbursement
at the applicable  rate of MPCI Gross  Premiums  Written  recognized  along with
normal operating  expenses incurred in connection with premium writings.  In the
third quarter, if a sufficient volume of policyholder  acreage reports have been
received and processed by the Company, the Company's policy is to recognize MPCI
Gross  Premiums  Written for the first nine months based on a re-estimate  which
takes into account actual gross premiums processed. If an insufficient volume of
policies has been processed,  the Company's  policy is to recognize in the third
quarter 20% of its full year  estimate of MPCI Gross  Premiums  Written,  unless
other circumstances require a different approach.  The remaining amount of Gross
Premiums  Written is  recognized  in the fourth  quarter,  when all  amounts are
reconciled.  The Company  also  recognizes  the MPCI  underwriting  gain or loss
during each quarter,  reflecting  the  Company's  best estimate of the amount of
such gain or loss to be  recognized  for the full year,  based on,  among  other
things,  historical results, plus a provision for adverse  developments.  In the
third  and  fourth  quarters,  a  reconciliation  amount is  recognized  for the
underwriting gain or loss based on final premium and loss information.

Regulation

The  Company's  admitted  insurance  businesses  are  subject to  comprehensive,
detailed regulation  throughout the United States, under statutes which delegate
regulatory,   supervisory   and   administrative   powers  to  state   insurance
commissioners.  The primary  purpose of such  regulations and supervision is the
protection of  policyholders  and claimants.  Depending on whether the insurance
company is domiciled in the state and whether it is an admitted or  non-admitted
insurer,  such authority may extend to such things as (i) periodic  reporting of
the insurer's financial condition,  (ii) periodic financial  examination,  (iii)
approval of rates and policy  forms,  (iv) loss  reserve  adequacy,  (v) insurer
insolvency,  (vi) the licensing of insurers and their agents, (vii) restrictions
on the payment of dividends and other distributions, (viii) approval

                                      -16-

<PAGE>



of changes in control, and (ix) the type and amount of permitted investments.

The Company's  MPCI program is federally  regulated and supported by the federal
government by means of premium subsidies to farmers,  expense  reimbursement and
federal reinsurance pools for private insurers.  Consequently,  the MPCI program
is subject to oversight by the legislative and executive branches of the federal
government,  including the FCIC. The MPCI program regulations  generally require
compliance  with federal  guidelines  with respect to  underwriting,  rating and
claims  administration.  The Company is required to perform continuous  internal
audit procedures and is subject to audit by several federal government agencies.

Results of Operations

For the three and nine months ended September 30, 1997, the Company recorded net
earnings  of $  4,122,280  and $  11,464,792  or  $0.74  and  $2.06  per  share,
respectively. This is approximately a 1% decrease and a 20.1% increase from 1996
comparable  amounts of $ 4,159,623 and  $9,542,721 or $0.79 and $1.83 per share.
The improved  earnings for the nine months ended were  attributable to continued
premium  growth  and  improved  expense  ratios  of the  nonstandard  automobile
insurance segment and continued growth and profit in the crop insurance segment.
The modest  decrease for the three months  ended  relates to the initial  public
offering on November 5, 1996 of Goran's subsidiary,  Symons International Group,
Inc., which reduced its ownership of SIG from 100% to 67%.

                                      -17-

<PAGE>






                                           For the three months ended
                                                 September 30,
                                                 (in thousands)
                                                 1997       1996
Nonstandard-Automobile Insurance
Operations:
(in thousands)
  Gross premiums written                        $77,505    $56,836
                                                =======    =======
  Net premiums written                          $61,789    $56,489
                                                =======    =======
  Net premiums earned                           $61,059    $54,701
  Fee income                                      4,380      2,486
  Net investment income                           2,702      2,780
  Net realized capital gain/(loss)                3,837      (834)
                                                  -----      -----
     TOTAL REVENUES                              71,978     59,133
                                                 ------     ------
  Losses and loss adjustment expenses            44,873     38,300
  Policy acquisition and general and
  administrative expenses                        18,170     15,922
                                                 ------     ------
     TOTAL EXPENSES                              63,043     54,222
                                                 ------     ------
  Earnings before income taxes                   $8,935     $4,911
                                                 ======     ======

GAAP Ratios
(Nonstandard Automobile Only):
  Loss and LAE Ratio                              73.5%      70.0%
  Expense ratio, net of billing fees              22.6%      24.6%
                                                  -----      -----
  Combined ratio                                  96.1%      94.6%
                                                  =====      =====

Crop Insurance Operations:
(in thousands)
  Gross premiums written                        $23,997    $14,796
                                                =======    =======
  Net premiums written                           $4,576     $7,941
                                                 ======     ======
  Net premiums earned                           $10,985    $14,393
  Net investment income                              52         46
  Other income                                    (181)      (895)
  Net realized capital gain (loss)                 (55)        ---
                                                   ----        ---
     TOTAL REVENUES                              10,801     13,544
                                                 ------     ------
  Losses and loss adjustment expenses             9,030      9,642
  Policy acquisition and general and
  administrative expenses                       (2,609)    (1,741)
  Interest expense                                   40        242
                                                     --        ---
     TOTAL EXPENSES                               6,461      8,143
                                                  -----      -----
  Earnings before income taxes                   $4,340     $5,401
                                                 ======     ======


                                      -18-

<PAGE>




                                         For the nine months ended
                                               September 30,
                                              (in thousands)
                                            1997           1996
Nonstandard-Automobile Insurance
Operations:
(in thousands)
  Gross premiums written                  $243,052      $119,126
                                          ========      ========
  Net premiums written                    $195,632      $118,578
                                          ========      ========
  Net premiums earned                     $189,303      $107,545
  Fee income                                11,584         4,819
  Net investment income                      7,796         4,215
  Net realized capital gain/(loss)           5,521         (622)
                                             -----         -----
     TOTAL REVENUES                        214,204       115,957
                                           -------       -------
  Losses and loss adjustment expenses      143,897        77,131
  Policy acquisition and general and
  administrative expenses                   53,662        31,617
                                            ------        ------
     TOTAL EXPENSES                        197,559       108,748
                                           -------       -------
  Earnings before income taxes             $16,645        $7,209
                                           =======        ======
GAAP Ratios
(Nonstandard Automobile Only):
  Loss and LAE Ratio                         76.0%         71.7%
  Expense ratio, net of billing fees         22.2%         24.9%
                                                           -----
  Combined ratio                             98.2%         96.6%
                                             =====         =====

Crop Insurance Operations:
(in thousands)
  Gross premiums written                  $132,353       $95,332
                                          ========       =======
  Net premiums written                     $21,256       $22,894
                                           =======       =======
  Net premiums earned                      $18,753       $20,615
  Net investment income                        144           142
  Other income                               3,406           253
  Net realized capital gain                   (55)            16
                                              ----           ---
     TOTAL REVENUES                         22,248        21,026
                                            ------        ------
  Losses and loss adjustment expenses       13,299        16,086
  Policy acquisition and general and
  administrative expenses                  (8,635)       (6,114)
  Interest expense                               1           469
                                                --           ---
     TOTAL EXPENSES                          4,729        10,441
                                             -----        ------
  Earnings before income taxes             $17,519       $10,585
                                           =======       =======
Statutory Capital and Surplus:
  Pafco                                    $23,418
                                           =======
  IGF                                      $40,552
                                           =======
  Superior                                 $71,455
                                           =======

Consolidated  Gross Premiums  Written  increased  43.2% in the third quarter and
72.4% year-to-date due to growth in both the nonstandard auto and crop segments.
Gross Premiums Written for the nonstandard  auto segment  increased 36.4% in the
third quarter and 104% year-to-date. While a portion of this increase relates to
four additional months of premium in 1997 of Superior, additional premium growth
relates  to  internal   growth  due  to  improved   service,   certain   product
improvements,  tougher uninsured  motorist laws in states such as California and
Florida and entrance into new states such as Nevada and Oregon.  Such increase

                                      -19-

<PAGE>



was  primarily due to volume  rather than rate  increases,  although the Company
adjusts rates on an ongoing basis.  Gross Premiums  Written for the crop segment
increased  62.2% in the third quarter and  increased  38.8%  year-to-date.  Such
year-to-date   increases  were  due  to  continued  industry  privatization  and
aggressive  marketing  efforts.   Remaining  gross  written  premiums  represent
commercial  business  which  was  ceded  100%  effective  January  1, 1996 to an
affiliate, Granite Reinsurance Company Ltd.

Net Premiums Written increased in the third quarter and year-to-date for 1997 as
compared  to 1996 due to the growth in Gross  Premiums  Written  offset by quota
share reinsurance.

In 1997, the Company ceded  15,716,000 and 47,420,000 of nonstandard  automobile
premiums during the third quarter and  year-to-date as part of a 20% quota share
treaty instituted  January 1, 1997. No such treaty was in effect during 1996. In
1997, the Company ceded  3,610,000 and  15,415,000 of crop hail premiums  during
the  third  quarter  and  year-to-date  as  part  of a 40%  quota  share  treaty
instituted  January 1, 1997. In 1996, crop hail premiums were ceded at a rate of
10%. The nonstandard  automobile quota share  reinsurance  treaty was reduced to
10% effective October 1, 1997 following additional capital  contributions to the
insurance companies from the proceeds of the Preferred Securities Offering.

Net Premiums Earned  increased for the three and nine months ended September 30,
1997 as compared to the corresponding  periods of the prior year, reflecting the
strong growth in Gross Written Premiums offset by the effects of the nonstandard
automobile and crop hail quota share treaties.

Fee income  increased  $2,590,846  and  $9,320,157 for the three and nine months
ended September 30, 1997 as compared to the  corresponding  periods of the prior
year.  Such increases  were due to billing fee income on nonstandard  automobile
business from an increase in in-force  policy count.  There was also an increase
in the receipt of CAT Coverage  Fees and CAT LAE  Reimbursement  Payments due to
higher premium volume.

Net investment  income/Net  realized gains and losses  increased  $6,043,837 and
$11,634,085  for the three and nine months ended  September 30, 1997 as compared
to the corresponding periods of the prior year. Realized gains were particularly
strong  in  the  third  quarter  on  the  strength  of the  equity  markets  and
corresponding sales of securities that had reached targeted pricing levels. Such
increases were also due to investment  income from Superior and greater invested
assets.

The Loss and LAE  Ratio for the  nonstandard  automobile  segment  was 73.5% and
76.0% for the three and nine  months  ended  September  30,  1997 as compared to
70.0% and 71.7% for the corresponding  periods in 1996. The Crop Hail Loss Ratio
in 1997 is 67.1%  compared  to 51.3% in 1996.  The  increase in the Loss and LAE
Ratio for the  nonstandard  automobile  segment  reflects  the recent  growth in
premium  volume in an effort to increase  market share and improve  economics of
scale. The $5.3 million reserve  adjustment in the second quarter  increases the
nine-month  Loss & LAE  Ratio  2.8%.  The  increase  was also  due to  increased
severity in certain  coverages.  The increase in the crop hail loss ratio is the
result of storm damage in the third quarter in certain eastern states.


                                      -20-

<PAGE>




Policy acquisition and general and  administrative  expenses have increased as a
result of the increased volume of business produced by the Company combined with
a higher  percentage  of net  premiums  retained  and  offset  by  increases  in
reinsurance commission income. Policy acquisition and general and administrative
expenses rose to $19,087,445  and  $52,951,577 or 24.9% and 24.1% of Net Premium
Earned for the three and nine  months  ended  September  30,  1997  compared  to
$15,198,508  and  $31,954,450  or 21.2% and 21.7% of Net  Premium  Earned in the
corresponding  periods  of  1996.  Such  increase  was  due to a  higher  mix of
nonstandard  automobile premiums in 1997 as compared to 1996. The Expense Ratio,
net of billing fees, for the nonstandard  automobile  segment  improved to 22.6%
and 22.2% for the three and nine months ended  September 30, 1997 as compared to
24.6% and 24.9% for the corresponding  periods in 1996, due to technological and
operational efficiencies, and continued economies of scale.

Due to the accounting for the crop insurance segment, operating expenses for the
three and nine months  ended  September  30,  1997  includes a  contribution  to
earnings of $2,609,000  and  $8,035,000,  as compared to  comparable  amounts of
$1,741,000 and $6,114,000 for the  corresponding  periods in 1996. Such increase
was due to greater Buy-up Expense  Reimbursement  Payments and MPCI underwriting
gain due to increased premium volumes.

The nonstandard  automobile quota share treaty reduced  premiums earned,  losses
and LAE incurred and policy acquisition and general  administrative  expenses by
$14,912,000,  $9,943,000  and  $4,596,000,  and  $30,724,000,  $20,855,000,  and
$9,101,000,  respectively,  for the three and nine months  ending  September 30,
1997, for a net pre-tax earnings reduction of $373,000 and $768,000 in the three
and nine months ending September 30, 1997. Reduction in expenses reflects ceding
commission income net of a deferred acquisition cost adjustment.

Amortization of intangibles  includes goodwill from the acquisition of Superior,
additional  goodwill from the acquisition of the minority  interest  position in
GGSH, debt or preferred  security issuance costs and  organizational  costs. The
increase in the third  quarter of 1997  reflects  the  effects of the  Preferred
Securities Offering.

Interest expense primarily  represents interest incurred since April 30, 1996 on
the GGS Senior Credit  Facility.  The GGS Senior Credit Facility was repaid with
the proceeds from the Preferred Securities Offering.

Income tax expense was 34.3% and 34.1% of pre-tax  income for the three and nine
months ended September 30, 1997 as compared to 31.5% and 38.6% in 1996.

Distributions  on Preferred  Securities  are calculated at a rate of 9.5% net of
income taxes & minority interest.

Financial Condition and Capital Reserves and Liquidity

The  Company's  total assets of  $696,101,391  at September  30, 1997  increased
$314,759,619 from $ 381,341,772 as of December 31, 1996. The primary reasons for
this increase were an increase of  $46,259,119  in cash and invested  assets and
increases in receivables and reinsurance  assets due to growth in premium volume
and premium due on installment  sales,  which  generates  billing fee income and
timing of crop  operations and an increase in goodwill due to the acquisition of
the minority  interest portion of GGSH. The increase in cash and invested assets
was due to the  increase  in cash flow from  operations  and  proceeds  from the
Preferred  Securities  Offering.  The Company did not  significantly  change its
investment mix or philosophy in 1997.

Net  cash  provided  by  operating  activities  in 1997  aggregated  $18,355,624
compared to $11,222,281  in 1996.  This increase in funds provided was caused by
additional cash of $ 2,881,098 from net earnings  adjusted for non-cash expenses
and realized gains or


                                      -21-

<PAGE>



losses,  continued  premium  growth which results in increased cash flow as loss
payments lag receipt of premiums.

Net cash used in investing  activities  increased  from  $79,136,787  in 1996 to
$114,689,283  in 1997  reflecting  investment  of  remaining  proceeds  from the
Preferred Securities Offering and cash flow from operations.

In 1997,  financing  activities  provided cash of  $96,310,732  compared to cash
provided of  $76,440,628  in 1996,  with funds in 1997 being  primarily from the
Preferred  Securities Offering while 1996 funds were provided from the financing
of the acquisition of Superior.


                                      -22-

<PAGE>



PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS
                    IGF instituted litigation against the FCIC on March 23, 1995
                    in  the  United  States  District  Court  for  the  Southern
                    District of Iowa seeking $4.3 Million as  reimbursement  for
                    certain expenses.  IGF alleges the FCIC wrongfully sought to
                    hold  IGF   responsible   for  these   expenses.   The  FCIC
                    counterclaimed  for  approximately  $1.2  Million  in claims
                    payments for which the FCIC contends IGF is responsible  for
                    as successor  to the run- off book of  business.  On October
                    27, 1997,  IGF reached an agreement  with the FCIC to settle
                    the case,  with both parties  dismissing  all claims against
                    one another which were subject to the  litigation.  The FCIC
                    has agreed to pay IGF a lump sum payment of $60,000.


ITEM 2.             CHANGES IN SECURITIES
                    None

ITEM 3.             DEFAULTS UPON SENIOR SECURITIES
                    None

ITEM 4.             SUBMISSION OF MATTER TO A VOTE OF SECURITY HOLDERS
                    None

ITEM 5.             OTHER INFORMATION
                    None

ITEM 6.             EXHIBITS AND REPORTS ON FORM 8-K
                    Form 8-K filed on August  26,  1997  regarding  issuance  of
                    Preferred   Securities  and  acquisition  of  remaining  48%
                    minority  interest  in GGSH.  Form 8-KA  filed on October 3,
                    1997   regarding   issuance  of  Preferred   Securities  and
                    acquisition of the remaining 48% minority interest in GGSH.

Pursuant to the  requirements of Section 13 or 15(d) 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.




Dated: November 12, 1997                 By: /s/ Alan G. Symons
                                         Alan G. Symons
                                         President





Dated: November 12, 1997                 By: /s/ Gary P. Hutchcraft
                                         Gary P. Hutchcraft
                                         Vice President, Treasurer and
                                         Chief Financial Officer


                                      -23-

<PAGE>


GORAN CAPITAL INC. - Consolidated                    Exhibit 11.01
Analysis of Earnings Per Share
As At:


                               September 30,                 September 30,
                                   1997                           1996
TSE Trading
Activity
                      Volume     Value       Average Price
Period Covered          #        (US $)          (US $)          (US $)
January to
September, 1997      2,183,863  $64,075,401     $29.34    A      $12.81





                                        September 30,        September 30,
                                            1997                 1996
Proceeds from Exercise of Warrants
and Options (US $)                       $3,551,952             $917,657
                                         ==========             ========
Shares Repurchased - Treasury
Method                                      121,060               71,653
                                            =======               ======
Shares Outstanding - Weighted
Average                                   5,552,097            5,226,707
Add: Options and Warrants
Outstanding                                 733,148              485,452
Less: Treasury Method - Shares
Repurchased                               (121,060)             (71,653)
                                          ---------             --------
Shares Outstanding for US GAAP
Purposes                                  6,164,185            5,640,506
                                          ---------            ---------
Net Earnings in Accordance with US
GAAP                                    $11,464,792           $9,377,761
                                        ===========           ==========
Earnings Per Share - US GAAP
(Primary and Fully Diluted)                   $1.86                $1.66
                                              =====                =====




                                      -24-