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, 2000

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

            For the transition period from _________ to ____________

                        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.)

                                   2 Eva Road
                                    Suite 200
                            Toronto, Ontario M9C 2A8
                               4720 Kingsway Drive
                           Indianapolis, Indiana 46205
                    (Address of Principal Executive Offices)

Registrant's telephone number, including area code:  (416) 662-0660 (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 May 1, 2000,  there were  5,876,398  shares of  Registrant's  common stock
issued and outstanding exclusive of shares held by Registrant.


<PAGE>


FORM 10-Q INDEX
                                       FOR THE QUARTER ENDED MARCH 31, 2000


        Page

      Number

PART I     FINANCIAL INFORMATION

Item 1     Financial Statements

           Unaudited Consolidated Financial Statements:
           Unaudited Consolidated Balance Sheets at March 31, 2000
           and December 31, 1999.............................................. 3

           Unaudited Consolidated Statements of Earnings (Loss)
           for the Three Months Ended March 31, 2000 and 1999   .............. 4

           Unaudited Consolidated Statements of Shareholders' Equity (Deficit)
           for the Three Months ended March 31, 2000 and 1999 ................ 5

           Unaudited Consolidated Statements of Cash Flows for

           the Three Months Ended March 31, 2000 and 1999 .................... 6

           Condensed Notes to Unaudited Consolidated Financial

           Statements......................................................... 7

Item 2     Management's Discussion and Analysis of Financial

           Condition and Results of Operations................................13

Item 3     Quantitative and Qualitative Disclosures About Market Risks........23

PART II    OTHER INFORMATION..................................................23

SIGNATURES      ..............................................................25

INDEX TO EXHBITS
           Exhibit 11 - Computation of Per Share Earnings (Loss) .............26




<PAGE>


PART I - FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
GORAN CAPITAL INC.
UNAUDITED CONSOLIDAED BALANCE SHEETS
(CANADIAN GAAP, stated in thousands of U.S. dollars)

<TABLE>
<CAPTION>
                                                                                 March 31,       December 31,
                                                                                   2000               1999
ASSETS

<S>                                                                               <C>                <C>
Cash and investments                                                              $219,005           $231,424
Accounts receivable:
    Receivables, net of allowance                                                  128,933             92,446
    Income taxes recoverable                                                            --              6,820
    Investments in and advances to related parties                                   1,853              1,646
        Total Accounts Receivable                                                  130,786            100,912
Reinsurance recoverable on paid and unpaid losses                                   44,540             88,293
Prepaid reinsurance premiums                                                        94,026             10,259
Capital assets, net of accumulated depreciation                                     21,277             21,967
Deferred policy acquisition costs                                                   12,490             13,920
Intangible assets                                                                   44,399             43,812
Other assets                                                                         7,723              9,335
           TOTAL ASSETS                                                           $574,246           $519,922

LIABILITIES
Accounts Payable:

    Reinsurance payables                                                           $84,851            $37,603
    Accrued and other payables                                                      19,196             28,543
                                                                                   104,047             66,146
Distributions payable on preferred securities                                        8,073              4,809
Loss and loss adjustment expenses                                                  174,136            219,918
Unearned premiums                                                                  165,802             90,007
Notes Payable                                                                        3,736             16,929
                                                                                   455,794            397,809
Minority interest:
    Company obligated manditorily redeemable preferred stock of trust
    subsidiary holding solely parent debentures                                    135,000            135,000
                                                                                   135,000            135,000
Shareholders' equity  (Deficit)                                                    (16,548)           (12,887)
           TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY                             $574,246           $519,922

See condensed notes to consolidated financial statements
</TABLE>


<PAGE>


GORAN CAPITAL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF EARNINGS (LOSS)
(CANADIAN GAAP, stated in thousands of U.S. dollars, except per share data)

<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                          March 31,

                                                                                   2000               1999

<S>                                                                               <C>                <C>
Gross premiums written                                                            $144,219           $152,022
Less ceded premiums                                                                104,790             84,751
Net premiums written                                                                39,429             67,271
Change in net unearned premiums                                                     (7,971)               147
Net premiums earned                                                                 47,400             67,124
Fee income                                                                           3,791              4,464
Net investment income                                                                3,248              3,508
Net realized gain (loss)                                                               365             (1,322)
        Total Revenues                                                              54,804             73,774

Losses and loss adjustment expenses                                                 38,793             58,995
Policy acquisition and general and administrative expenses                          14,938             11,630
Interest expense                                                                       203                 74
Amortization of intangibles                                                            531                605
    Total Expenses                                                                  54,465             71,304
    Earnings (loss) before undernoted items                                            339              2,470
Provision (benefit) for income taxes                                                   487               (491)
Accrued distribution on preferred securities                                         3,264              3,162
Minority interest:                                                                      --               (324)
Earnings (loss) from continuing operations                                          (3,412)               123
Loss from discontinued operations                                                       --                 --
    Net earnings (loss)                                                            $(3,412)              $123

Earnings (loss) per share - basic                                                      $(0.58)          $0.02
Earnings (loss) per share - fully diluted                                              $(0.58)          $0.02
Earnings (loss) per share - operating                                                  $(0.64)          $0.17


See condensed notes to consolidated financial statements


<PAGE>

</TABLE>

GORAN CAPITAL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (DEFICIT)
(Canadian GAAP, stated in thousands of U.S. dollars)
<TABLE>
<CAPTION>


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

<S>                                      <C>              <C>                <C>        <C>                <C>
Balance at December 31, 1998             $19,317          $2,775             $252       $27,381            $49,725

Issuance of common shares                    ---             ---              ---           ---                ---

Change in cumulative
translation adjustment                       ---             ---             (107)          ---               (107)

Net earnings                                 ---             ---              ---           123                123

Balance at March 31, 1999                   $19,317          $2,775             $145       $27,504            $49,741

Balance at December 31, 1999                $19,317          $2,775              $13     $(34,992)          $(12,887)

Issuance of common shares                       ---             ---              ---           ---                ---

Change in cumulative

translation adjustment                          ---             ---            (249)           ---               (249)
                                                                                            (3,412)            (3,412)
Net earnings (loss)                             ---             ---              ---

Balance at March 31, 2000                   $19,317          $2,775           $(236)       $(38,404)          $(16,548)

See notes to consolidated financial statements

</TABLE>


<PAGE>


GORAN CAPITAL INC.
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
(CANADIAN GAAP, stated in thousands of U.S. dollars)
<TABLE>
<CAPTION>


                                                                                      Three Months Ended
                                                                                          March 31,

                                                                                   2000               1999

CASH FLOWS  PROVIDED BY (USED IN) OPERATING ACTIVITIES
<S>                                                                                <C>                   <C>
    Net earnings (loss) for the period                                             $(3,412)              $123
    Adjustments

        Amortization and depreciation                                                2,073              1,426
        Loss (gain) on disposal of investments                                        (365)             1,322
        Minority interest in net income (loss) of consolidated subsidiary               --               (324)
        Decrease (increase) in other assets                                              7             (9,833)
        Decrease (increase) in deferred policy acquisition  costs                    1,430                980
        Increase (decrease) in unearned premiums                                    75,795             65,357
        Increase (decrease) in loss and loss adjustment expenses                   (45,782)           (22,966)
        Decrease (increase) in accounts receivable                                 (29,874)           (67,780)
        Increase (decrease) in accounts payable                                     37,901             92,529
        Decrease (increase) in recoverable on paid and unpaid                       43,753              7,426
        losses
        Decrease (increase) in prepaid reinsurance premiums                        (83,767)           (60,892)
        Increase (decrease) in future income taxes payable                              --              3,281
                                                                                    (2,241)            10,649

NET CASH (USED IN) FINANCING ACTIVITIES:
    Increase (reduction) of borrowed funds                                         (13,193)            (9,224)
    Increases in distributions payable on preferred securities                       3,264                 --
                                                                                    (9,929)            (9,224)
NET CASH (USED IN) INVESTING ACTIVITIES:
    Net (purchase) sale of marketable securities                                    12,862            (10,340)
    Net purchase of capital assets                                                    (716)              (970)
                                                                                    12,146            (11,310)
Change in cash and cash equivalents during the period                                  (24)            (9,885)
Cash and cash equivalents, beginning of period                                      32,874             42,759
Cash and cash equivalents, end of period                                           $32,850            $32,874



See condensed notes to consolidated financial statements

</TABLE>


<PAGE>


                               GORAN CAPITAL INC.
            CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

                                   (UNAUDITED)

                              As at March 31, 2000



CONDENSED NOTES TO THE UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.       Basis of Presentation

         The financial  statements  included in this report are the consolidated
         financial  statements of Goran Capital Inc. and its  subsidiaries  (the
         "Company").  The consolidated  financial  statements have been prepared
         pursuant to the rules and  regulations  of the  Securities and Exchange
         Commission ("SEC"). In management's opinion, these financial statements
         include  all   adjustments   (consisting   only  of  normal   recurring
         adjustments)  necessary  for a  fair  presentation  of the  results  of
         operations for the interim periods presented. Pursuant to SEC rules and
         regulations,  certain  information  and footnote  disclosures  normally
         included in financial  statements prepared in accordance with generally
         accepted  accounting  principles  have been  condensed  or omitted from
         these statements unless significant  changes have taken place since the
         end of the most recent fiscal year. For this reason,  the  accompanying
         consolidated  financial  statements and notes thereto should be read in
         conjunction with the financial  statements and notes for the year ended
         December 31, 1999 included in the Company's  1999 Annual Report on Form
         10-K. Results for any interim period are not necessarily  indicative of
         results to be expected for the year.

         These unaudited consolidated 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 12.  All  material
         intercompany amounts have been eliminated.

2.       Supplemental Cash Flow Information

         Cash  payments of interest  were  $581,000  and  $311,000 for the three
         months ended March 31, 2000 and 1999,  respectively.  Cash received
         related to Federal Income taxes was $(6,586,000) and $(6,548,000) for
         the first three months of 2000 and 1999, respectively.

3.       Notes Payable

         IGF  Insurance  Company,   the  Company's  subsidiary  ("IGF"),  has  a
         revolving  bank line of credit (the "IGF  Revolver").  During the first
         quarter 2000,  the maximum  amount that could be borrowed under the IGF
         Revolver was reduced from $15,000,000 to $8,000,000 and it was extended
         through  December  15,  2000.  As of April 1, 2000,  the entire line of
         credit was available to IGF. This line is collateralized by receivables
         and real property.  The IGF Revolver  contains certain  covenants which
         (i) restrict IGF's ability to accumulate common stock; (ii) set minimum
         standards for investments and policyholder surplus; and (iii) limit the
         ratio of net written premiums to statutory surplus.  At March 31, 2000,
         IGF was not in compliance with a minimum  statutory  surplus  covenant;
         however,  IGF has received a waiver from the bank for the period ending
         March 31, 2000. Although the Company believes it will be able to obtain
         waivers  from the bank as  necessary  in the future there and can be no
         assurance thereof.

         The average  interest  rate on the IGF Revolver was 6.75% for the three
         months  ended March 31, 1999 and 7.91% for the three months ended March
         31, 2000.

         Notes payable also includes a $1,000,000  note due 2001 on the purchase
         of North American Crop Underwriters,  Inc. ("NACU") at no interest. The
         balance of notes payable at March 31, 2000 includes three smaller notes
         (less than $300,000 each) assumed in the acquisition of NACU which have
         various due dates from 2002 to 2006 with periodic  payments at interest
         rates ranging from 7% to 9.09%.


<PAGE>



4.       Preferred Securities

         The  preferred  securities  represent   company-obligated   mandatorily
         redeemable  preferred  securities of a trust subsidiary (the "Preferred
         Securities")  holding solely parent  debentures which have a term of 30
         years with semi-annual  interest payments commencing February 15, 1998.
         The Preferred  Securities  may be redeemed in whole or in part after 10
         years. Symons International Group, Inc. ("SIG"), a 68% owned subsidiary
         of Goran, deferred the semi-annual  interest payment that was
         due February  2000.  Under the terms of the indenture for the preferred
         Securities,  the Company is  permitted  to defer such payment for up to
         five years.

         The indenture for the Preferred Securities contains certain restrictive
         covenants.  Some of  these  covenants  are  based  upon  the  SIG's
         consolidated  coverage  ratio  of  earnings  before  interest,   taxes,
         depreciation  and  amortization  ("EBITDA")  whereby  if the  SIG's
         EBITDA falls below 2.5 times  consolidated  interest expense (including
         Preferred Security distributions) for the most recent four quarters the
         following restrictions become effective:

o        SIG may not incur additional indebtedness or guarantee
         additional indebtedness.

o        SIG may not make certain  restricted  payments  including
         loans or advances to affiliates,  stock
         repurchases and a limitation on the amount of dividends is inforce.

o        SIG may not increase its level of non-investment grade
         securities  defined as equities,  mortgage loans, real estate,
         real  estate  loans  and  non-investment  grade  fixed  income
         securities.

         These  restrictions  currently  apply  as  SIG's  consolidated
         coverage  ratio was (5.00) as of March 31, 2000,  and will  continue to
         apply  until the  Company's  consolidated  coverage  ratio  exceeds the
         amount set forth in the  indenture.  The Company is in compliance  with
         the additional  restrictions  and is not in default in its  obligations
         with the regard to the Preferred Securities.

5.       Regulatory Affairs

         As previously  reported,  Pafco General Insurance Company ("Pafco") has
         agreed to an order  under  which the Indiana  Department  of  Insurance
         ("IDOI") may monitor more closely the ongoing  operations  of Pafco due
         to the  risk-based  capital ratio being below the Company  action level
         using the  National  Association  of Insurance  Commissioners  ("NAIC")
         guidelines  and applicable  law. This order remains in effect.  Pafco's
         inability or failure to comply with this order could result in the IDOI
         requiring  further  reductions in Pafco's permitted premium writings or
         in the IDOI  instituting  future  proceedings  against Pafco. The final
         report  has yet been  issued  by the IDOI on its  previously  disclosed
         target  examination  of Pafco,  covering  loss  reserves,  pricing  and
         reinsurance and no action was taken thereon.

         Pafco has also agreed with the Iowa  Department of Insurance  ("IADOI")
         to (i) limit its policy counts on automobile  business in Iowa and (ii)
         provide  the IADOI with policy  count  information  on a monthly  basis
         until June 30, 2000 and thereafter on a quarterly basis.

         In addition Pafco has agreed to provide monthly  financial  information
         to other  departments  of  insurance  in  states  in  which  it  writes
         business.

         As  previously  disclosed,  with  regard  to IGF and as a result of the
         losses  experienced  by IGF in the crop insurance  operations,  IGF has
         agreed with the IDOI to provide  monthly  financial  statements  to the
         IDOI,  consult  monthly with the IDOI, and to obtain prior approval for
         affiliated party transactions.  IGF is currently in compliance with its
         agreement to provide monthly financial statements to the IDOI.

         IGF has agreed  with the IADOI  that it will not write any  nonstandard
         business, other than that which it is currently writing until such time
         as IGF has:  (i)  increased  surplus;  (ii) a net  written  premium  to
         surplus ratio of less than three to one; and (iii)  surplus  reasonable
         to its risk.

         The  Florida   Department  of  Insurance  ("FDOI")  has  concluded  its
         examinations of Superior Insurance Company  ("Superior") with regard to
         review of systems and year 2000 compliance.  No significant  action was
         taken  by the  FDOI as a  result  of  these  examinations.  The  FDOI's
         financial  review of Superior  for the year ended  December 31, 1999 is
         ongoing,  and Superior is maintaining ongoing discussions with the FDOI
         regarding  reserve levels,  financial  review and reporting,  and other
         issues.  Superior  has also  agreed  with  the  Arizona  Department  of
         Insurance to provide it with monthly financial statements.


<PAGE>



         The Company's operating  subsidiaries,  their business operations,  and
         their transactions with affiliates,  including the Company, are subject
         to  regulation  and  oversight  by the IDOI,  the FDOI,  the  insurance
         regulators of other states in which the  subsidiaries  write  business,
         and  in the  case  of  IGF,  the  Federal  Crop  Insurance  Corporation
         ("FCIC").  The Company is a holding  company and all of its  operations
         are  conducted  by  its  subsidiaries.   Regulation  and  oversight  of
         insurance companies and their transactions with affiliates is conducted
         by  state  insurance  regulators  and,  in the case of IGF,  the  FCIC,
         primarily  for  the  protection  of  policyholders   and  not  for  the
         protection of other  creditors or of  shareholders.  Failure to resolve
         outstanding  issues with the IDOI,  the FDOI and other  regulators in a
         manner  satisfactory  to the Company could result in future  regulatory
         actions  or  proceedings  that  materially  and  adversely  affect  the
         Company.

6.       Commitments and Contingencies

         As  previously  reported,  a  complaint  for a  class  action  alleging
         violations of Sections 10(b) and 20(a) of the  Securities  Exchange Act
         of 1934 was filed  against the Company and certain of its  officers and
         directors in the United States District Court for the Southern District
         of Indiana. The Company intends to vigorously defend the claims brought
         against it. No material developments have occurred since last reported.

         As previously reported, the California Department of Insurance ("CDOI")
         has  advised  the Company  that it is  reviewing a possible  assessment
         which could total $3,000,000. As the ultimate outcome of this potential
         assessment  is not deemed  probable,  the  Company  has not accrued any
         amount  in  its  consolidated   financial   statements.   Although  the
         assessment  has not been  formally  made by the CDOI at this time,  the
         Company will vigorously defend any potential assessment and believes it
         will  prevail.  No  material  developments  have  occurred  since  last
         reported.

         As  previously  reported,  IGF is a party to a number of pending  legal
         proceedings  relating to a product  sold in 1998 (AgPI) which has since
         been discontinued. Approximately $22,400,000 was paid through March 31,
         2000.  A reserve of  approximately  $12,100,000  remains.  No  material
         developments have occurred since last reported.

         As  previously  reported,  two  assertions  have been  made in  Florida
         alleging  that service  charges or finance  charges are in violation of
         Florida   law.  The   plaintiffs   are   attempting   to  obtain  class
         certification  in  these  actions.  The  Company  believes  that it has
         substantially  complied with the premium  financing statute and intends
         to vigorously defend any potential loss. No material  developments have
         occurred since last reported.

         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 Company's  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.

         SIG is a joint and  several  guarantor  in a  $7,250,000  debt
         collateralized  by  operating  assets  held in an  entity  in which SIG
         is a 50% owner.  The estimated  fair market value of the assets
         approximates the debt.

7.       Loss Development on Prior Accident Years

         During the first  quarter  of 2000 the  Company  experienced  favorable
         development  on its  year end 1999  loss  and loss  adjustment  expense
         ("LAE")  reserves for the  nonstandard  auto operation in the amount of
         $300,000. As the result of favorable  settlement of outstanding
         claims on surplus  line  policies,  the Company  experienced  favorable
         development  of $100,000  and this amount is included in the results of
         the Company's nonstandard auto segment. In total, the Company's results
         for nonstandard  auto include  favorable  development on prior accident
         years of $400,000.

         During  the  same  time  period  the  Company   experienced   favorable
         development  on its year end crop  insurance  reserves in the amount of
         $600,000. Although the aggregate reserve development was favorable, the
         Company  experienced an adverse loss reserve development of $700,000 on
         crop hail and named peril claims caused by claims  reported late.  This
         was offset by a catastrophic  coverage ("CAT") and multiple-peril  crop
         insurance  ("MPCI") LAE  reimbursement  of $1,300,000 for the Company's
         handling of 1999 MPCI and CAT claims.

8.       Segment Disclosures

         The Company has two reportable segments based on products:  nonstandard
         automobile  insurance and crop insurance.  The  nonstandard  automobile
         segment offers  personal  nonstandard  automobile  insurance  coverages
         through a network of  independent  general  agencies.  The crop segment
         writes MPCI and crop hail insurance through  independent  agencies with
         its primary  concentration in the midwest.  The accounting  policies of
         the segments  are the same as those  described in the December 31, 1999
         annual  report in  "Nature  of  Operations and  Significant  Accounting
         Policies."  There are no  significant  intersegment  transactions.  The
         Company evaluates  performance and allocates  resources to the segments
         based on profit or loss from operations before income taxes.

         The  following  is a  summary  of  the  Company's  segment  data  and a
         reconciliation  of  the  segment  data  to the  Consolidated  Financial
         Statements.  "Corporate  and Other"  includes  operations  not directly
         related to the reportable  business segments and unallocated  corporate
         items (i.e., corporate investment income, interest expense on corporate
         debt and  unallocated  overhead  expenses).  Segment  assets  are those
         assets in the  Company's  operations in each  segment.  "Corporate  and
         Other" assets are principally  cash,  short-term  investments,  related
         party assets, intangible assets, and capital assets.


<PAGE>


         The following tables show financial data by segment (in thousands):
<TABLE>
<CAPTION>

                                                                                      Three Months Ended
                                                                                          March 31,

                                                                                   2000               1999

NONSTANDARD AUTOMOBILE INSURANCE OPERATIONS
<S>                                                                                <C>                <C>
    Gross premiums written                                                         $59,569            $61,171
    Net premiums written                                                            30,469             62,526
    Net premiums earned                                                             43,040             65,396
    Fee income                                                                       3,934              4,521
    Net investment income                                                            2,860              3,164
    Net realized gain (loss)                                                           365             (1,382)
        TOTAL REVENUES                                                              50,199             71,699
    Losses and loss adjustment expense                                              37,220             51,313
    Policy acquisition and general and administrative expenses                      17,560             19,595
        TOTAL EXPENSES                                                              54,779             70,908
    Earnings (loss) before income taxes                                            $(4,579)              $791
GAAP RATIOS (Nonstandard Automobile Only):
    Loss and LAE Ratio (2)                                                              86.5%              78.5%
    Expense ratio, net of billing fees (3)                                              31.7%              23.0%
    Combined ratio (4)                                                                 118.2%             101.5%

CROP INSURANCE OPERATIONS:
    Gross premiums written                                                         $84,360            $90,723
    Net premiums written                                                             7,570             $1,613
    Net premiums earned                                                              2,935            $(1,060)
    Fee income                                                                        (159)               (59)
    Net investment income                                                              125                 57
    Net realized capital gain (loss)                                                    --                 --
        TOTAL REVENUES                                                               2,903             (1,062)
    Losses and loss adjustment expenses                                              2,440              5,174
    Policy acquisition and general and administrative expenses(1)                   (3,792)            (8,008)
    Interest and amortization of intangibles                                           243                169
        TOTAL EXPENSES                                                              (1,109)            (2,665)
    Earnings (loss) before income taxes                                             $4,010             $1,603

(1)   Negative crop expenses are caused by inclusion of MPCI expense reimbursement and underwriting gain.
(2)   Loss and LAE ratio:  ratio of loss and LAE  incurred during the period, as a percentage of net premium
         earned.
(3)   Expense ratio, net of billing fees:  ratio of policy acquisition and general and administrative  expense
         less fee income, as a percentage of net premium earned.
(4)   Combined ratio:  sum of the loss and LAE ratio plus the expense ratio net of billing fees.

</TABLE>

<PAGE>
<TABLE>
<CAPTION>



                                                                               Three Months Ended
                                                                                   March 31,

                                                                             2000           1999
         Earnings (loss) before income taxes,  preferred securities and minority
         interest:

<S>                                                                        <C>                 <C>
             Nonstandard automobile                                        $(4,581)            $791
             Crop                                                            4,011            1,603
                 Segment totals                                               (570)          $2,394
             Corporate and other                                               909               76
                 Consolidated totals                                          $339           $2,470

                                                                           March 31,    December 31,
                                                                             2000           1999
         Segment assets:
             Nonstandard automobile                                        $258,323        $229,640
             Crop                                                           189,681         145,622
             Corporate and other                                            126,242         144,660

         Total  assets of the crop  business  are  subject  to  normal  cyclical
         fluctuations.
</TABLE>

9.       Reclassifications

         Certain  prior period  amounts have been  reclassified  to conform with
         current period presentation.

10.      Earnings Per Share

         Basic and diluted net earning (loss) per share are computed by dividing
         net  earnings  (loss)  as  reported  by the  average  number  of shares
         outstanding as follows:
<TABLE>
<CAPTION>

                                                                             Three Months Ended
                                                                                  March 31,
                                                                             2000          1999

         Basic:
<S>                                                                         <C>           <C>
           Weighted-average common shares outstanding                       5,876,398     5,876,398

         Diluted:
           Weighted-average common shares outstanding                       5,876,398     5,876,398
           Dilutive effect of stock options (1)                                    --        43,946
           Shares Repurchased                                                      --      (21,251)
         Average common shares outstanding assuming dilution                5,876,398     5,899,093

</TABLE>

         (1) Only those options with a dilutive  effect were included  above for
         the three months ended.  Total options  outstanding  amounts to 660,708
         (1999 -  682,572)  of  which  660,708  (1999  -  638,626)  options  are
         antidilutive and therefore are excluded from the calculation of average
         common shares outstanding, assuming dilution and fully diluted earnings
         per share is the same as basic earnings per share.

11.      Subsequent Events

         Effective April 1, 2000, the new and renewal  nonstandard  auto premium
         written by IGF will no longer be reinsured  by Pafco.  On April 6, 2000
         Granite  Reinsurance  Company  Ltd,  a  subsidiary  of Goran,  acquired
         $10,000,  000 principal value of the Preferred  Securities at a cost of
         $1,250,000.


<PAGE>



12.      United States Accounting Principles

         These unaudited consolidated financial statements have been prepared in
         accordance with CDN GAAP. The differences  between CDN GAAP and US GAAP
         are as follows (in thousands):
<TABLE>
<CAPTION>


                                                               March 31, 2000      December 31, 1999

         Shareholders'     equity     (deficit)    in
<S>                                                         <C>                      <C>
         accordance with Canadian GAAP                      $(16,548)                $(12,887)

         Add (deduct) effect of difference in accounting for:

             Receivable from sale of capital stock              (300)                    (300)

             Unrealized gain (loss) on investments*           (4,928)                  (4,874)

         Shareholders'     equity     (deficit)    in
         accordance with US GAAP                            $(21,776)                 $18,061
</TABLE>

         *Note:   The increase  (decrease) in shareholders'  equity attributable
                  to the  unrealized  gain  (loss) of $(4,928)  and  $(4,874) at
                  March 31, 2000 and December 31, 1999, respectively, are net of
                  deferred  tax  recovery of $2,637  which was fixed at December
                  31, 1999 when the Company's net deferred tax assets were fully
                  offset by a valuation allowance.

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

OVERVIEW OF THE COMPANY

The Company owns approximately 68% of Symons International  Group, Inc. ("SIG").
SIG in turn owns 100% of Pafco, Superior and IGF. Additionally, the Company owns
100% of Granite  Reinsurance  Company Ltd.  ("Granite  Re"),  Granite  Insurance
Company ("Granite") and Symons International Group, Inc. Florida ("SIGF").

<PAGE>



Nonstandard Automobile Insurance Operations

Pafco,  Superior,  Superior Guaranty Insurance Company ("Superior Guaranty") and
Superior  American  Insurance Company  ("Superior  American") are engaged in the
writing of  insurance  coverage for  automobile  physical  damage and  liability
policies.  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 or 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 risk. 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.

Crop Insurance Operations

The two principal  components of the Company's crop insurance  business are MPCI
and private named peril crop  insurance,  primarily  crop hail  insurance.  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.

The Company generates  revenue like other private insurers  participating in 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 with the federal government. The Company may also pay
a portion of the aggregate  loss,  in respect of the business it writes,  if the
losses exceed  certain  levels.  The Company writes MPCI and crop hail insurance
through approximately 2,850 independent agencies in 46 states.

The  Company's  risk in the first two  quarters  of the year is  affected to the
following  facts:  (1) the Company has a large  exposure of crops planted in the
fall and winter  (citrus  and  nursery in  Florida,  nursery in Texas,  wheat in
Kansas),  (2) the Company's crop revenue  coverage ("CRC") risk which is tied to
commodity  prices is quantified  in July,  November and December but is incurred
throughout the various growing seasons, (3) the preventative  planting risk that
the Company incurs on its traditional  spring crops, and (4) the planting of its
spring  crops (corn and soybeans in the  Midwest),  the majority of which occurs
prior  to the  end of May of any  given  crop  year.  Also,  MPCI  policies  are
continuous  and  automatically  renew each year unless the insured  notifies the
Company prior to March 15 of each year.

In addition to MPCI, the Company offers stand alone crop hail  insurance,  which
insures  growing crops against damage  resulting from hailstorms and involves no
federal  participation.  The Company  also offers a  proprietary  product  which
combines the application and underwriting  process for MPCI and hail coverages -
HAILPLUS(TM)  ("HAILPLUS").  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  37% of the Company's  hail policies are written in
combination with MPCI. Although both crop hail and MPCI provide coverage against
hail damage,  the private crop hail coverages allow farmers to 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.

In addition to crop hail  insurance,  the Company also sells  insurance  against
crop damage from other  specific  named perils.  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.

The Company has started three new business  initiatives  related to  agriculture
risk management:  agronomy services, price risk management,  and carbon emission
reduction  credits.  Each will provide the  opportunity to increase fee revenue.
Fee revenue  provides the Company with limited risk and high profit margins from
its same base of operations and thus  contributes to capital and surplus growth.
Fee revenue in total is not projected to be more than $2.0 million for 2000.

The crop insurance  business is seasonal by geographic  region;  spring crops in
northern and midwestern states,  fall crops in southern states such as fruit and
nuts,  winter crops in coastal  states such as California  and summer cash crops
grown in all states. The Company also insures long term crops such as timber and
nurseries. While this seasonality is time specific for each crop, the associated
tasks of sales and marketing primarily occur before each respective crop-growing
season. The customer support,  applications and claims processing tasks are time
and event driven within the mid to later part of the growing season;  many times
being finished  after the growing  season and harvest is completed.  The bulk of
the loss  adjustment  activities for the spring and fall crops occur between May
and November.  These same activities occur for winter crops,  such as fruits, in
January and February, and for cash crops throughout the year.

Throughout  the year the Company  provides  to its  customers  services  such as
education, agronomy training, soil sampling, grid mapping for precision farming,
insurance advice and loss adjusting.

OTHER OPERATIONS
Granite Re is a finite risk reinsurance company based in Barbados.

Granite is a Canadian  federally licensed insurance company which ceased writing
new insurance policies on January 1, 1990.

SIGF is a Florida based surplus lines insurance  agency.  These  operations have
been discontinued effective January 1, 1999.

FORWARD LOOKING STATEMENTS AND CERTAIN RISKS

All statements,  trend analyses, and other information herein contained relative
to markets for the Company's products and/or trends in the Company's  operations
or  financial  results,  as well as other  statements  including  words  such as
"anticipate,"  "could," "feel(s),"  "believe(s),"  "plan," "estimate," "expect,"
"should,"   "intend,"   "will"  and  other   similar   expressions,   constitute
forward-looking statements under the Private Securities Litigation Reform Act of
1995. These  forward-looking  statements are subject to known and unknown risks;
uncertainties  and other factors which may cause actual results to be materially
different  from  those  contemplated  by the  forward-looking  statements.  Such
factors include, among other things: (i) general economic conditions,  including
prevailing  interest  rate levels and stock  market  performance;  (ii)  factors
affecting  the  Company's  crop  insurance  operations  such as  weather-related
events,  final harvest  results,  commodity price levels,  governmental  program
changes,  new product  acceptance  and commission  levels paid to agents;  (iii)
factors  affecting  the  Company's  nonstandard  automobile  operations  such as
premium volume and levels of operating  expenses as compared to premium  volume;
and (iv) the factors described in this section and elsewhere in this report.

Losses Have Been Reported and May Continue

The Company has mostly  reported net losses on a quarterly basis since the third
quarter of 1998.  Net losses for the  quarter  ended in March 31,  2000  totaled
$(3,412,000). Losses for the first quarter of 2000 were due primarily to reduced
earnings in the  nonstandard  auto  segment.  Despite  the  losses,  loss ratios
started to improve in the first quarter of the current year for nonstandard auto
over the prior  quarter.  Also,  during the first  quarter of 2000,  the Company
experienced  favorable  development  on its  loss and  loss  adjustment  expense
reserves for accidents  occurring in 1999 and prior years. Losses in the current
quarter for the  nonstandard  auto  segment were  primarily  due to decreases in
premiums  and fee  income  that  exceeded  operating  expenses.  The  Company is
actively seeking rate increases and implementing other underwriting  initiatives
and expense reductions which are likely to result in reduced premium volume this
year.

The nonstandard auto business strategy is to retain only profitable business and
reduce expenses  proportionately.  For first quarter 2000 and 1999 respectively,
the crop segment  reported  pre-tax  earnings of  approximately  $4,000,000  and
$1,600,000.  The crop segment business  strategy is to continue focusing on MPCI
and named peril insurance, which is primarily crop/hail insurance.  Although the
Company  has  taken a number  of  actions  to  address  the  factors  that  have
contributed  to these past  operating  losses,  there can be no  assurance  that
operating losses will not continue.

Recent and Further Regulatory Actions May Affect the Company's Future Operations

The Company's insurance company  subsidiaries,  their business  operations,  and
their  transactions  with  affiliates,  including  the  Company,  are subject to
extensive  regulation  and  oversight  by the Indiana  Department  of  Insurance
("IDOI"), the Florida Department of Insurance ("FDOI"), the insurance regulators
of other states in which the insurance company  subsidiaries write business and,
in the case of IGF, the Federal Crop Insurance Corporation  ("FCIC").  Moreover,
the insurance  company  subsidiaries'  losses,  adverse trends and uncertainties
discussed  in this report have been and continue to be matters of concern to the
domiciliary and other insurance  regulators of the Company's  insurance  company
subsidiaries  and have resulted in enhanced  scrutiny and regulatory  actions by
several  regulators.  The Company relies on payment of management  fees from the
regulated  insurance  subsidiaries to support its cash flow needs, and continued
payment of those fees is subject to regulatory oversight. The primary purpose of
insurance   regulation   is  the   protection  of   policyholders   rather  than
stockholders.  Failure to resolve  issues with the IDOI, the FDOI, the FCIC, and
with other  regulators  (including  the risk based  capital  levels of Pafco and
IGF), in a manner satisfactory to the Company could impair the Company's ability
to execute its business  strategies  or result in future  regulatory  actions or
proceedings  that  otherwise  materially  and  adversely  affect  the  Company's
operations.

A.M. Best Rating May Adversely Affect the Company's Ability to Retain and Expand
 its Business

A.M.  Best Company  rates  insurance  companies  based on factors of concerns to
policyholders.  No  changes  in the  ratings of the  Company  subsidiaries  have
occurred since those reported previously. It is not likely that the ratings will
be improved unless the Company  improves its future operating  performance.  One
factor in an insurer's  ability to compete  effectively is its A.M. Best rating.
There can be no assurance  that the current or future ratings will not adversely
affect the Company's competitive position.

The Company is Subject to a Number of Pending Legal Proceedings

As previously  reported and discussed  elsewhere in this report,  the Company is
involved in a number of pending  legal  proceedings.  Most of these  proceedings
remain in the early  stages.  Although  the  Company  believes  that many of the
allegations of wrongdoing are without merit and intends to vigorously defend the
claims brought against it, there can be no assurance that such  proceedings will
not have a materially adverse effect on the Company's operations.

The Terms of the Trust Preferred Securities May Restrict The Company's Ability
 to Act

SIG has issued through a wholly owned trust  subsidiary  $135,000,000  aggregate
principal  amount  in trust  originated  preferred  securities  . The  Preferred
Securities  have a term of 30 years with annual  interest  payments of 9.5% paid
semi-annually.  The obligations of the Preferred  Securities are funded from the
Company's  nonstandard  automobile management company and dividend capacity from
the crop  insurance  business.  The Company  deferred the  semi-annual  interest
payment that was due February  2000 and may continue to defer such  payments for
up to five years as permitted by the  indenture  for the  Preferred  Securities.
Although there is no present default under the indenture which would  accelerate
the payment of the  Preferred  Securities,  the  indenture  contains a number of
convenants which may restrict the Company's ability to act in the future.  These
covenants  include  restrictions on the SIG's ability to: incur or guarantee
debt; make payment to affiliates;  repurchase its common stock; pay dividends on
common stock;  and make certain  investments  other than investment  grade fixed
income  securities.  There  can  be no  assurance  that  compliance  with  these
restrictions and other provisions of the indenture for the Preferred  Securities
will not  adversely  affect  the  Company's  ability to  improve  its  operating
results.

REVIEW OF CONSOLIDATED OPERATIONS

Net (Loss)
For the three months ended March 31,  2000,  the Company  recorded a net loss of
$(3,412,000)  or $(0.58) per share (basic and diluted).  The net loss  increased
over the same  quarter in 1999 by  $(3,535,000)  or $(0.60) per share (basic and
diluted).

Income  before  taxes  and   distributions  on  preferred   securities  for  the
nonstandard  automobile  segment  showed a loss of  $(4,581,000)  for the  three
months  ended  March 31, 2000  compared  to  earnings of $791,000  for the three
months ended March 31, 1999. These losses were driven primarily by a decrease in
net premiums earned.

Income  before taxes and  distributions  on preferred  securities  for the three
months ended March 31, 2000 in the crop segment  showed  earnings of  $4,011,000
which  compares  to  earnings of  $1,603,000  for the same  period in 1999.  The
increase  in  earnings  was  primarily  due to a decrease in the net loss to net
premium  retained  ratios for crop hail and named peril in the first  quarter of
2000 as compared to the same period in the prior year.

Income before tax and  distributions  on preferred  securities for the corporate
segment were  $909,000 for the three months ended March 31, 2000 and $76,000 for
the same period in 1999..

Gross Premiums Written

Gross premiums written for the nonstandard automobile segment decreased 2.6% for
the three months  ended March 31, 2000  compared to the three months ended March
31, 1999.  The primary  reasons for this decline in volume are the downsizing by
the  Company of its  nonstandard  automobile  business  in  certain  competitive
markets, rate increases and other underwriting  initiatives intended to increase
profitability.

Gross premiums written for the crop segment  decreased 7.0% for the three months
ended March 31, 2000 compared to the  comparable  period in 1999.  Such decrease
was due to lower than  expected  first  quarter  2000 crop hail  business.  Crop
premiums  (expressed  in  thousands)  for the three months ended March 31 are as
follows:
<TABLE>
<CAPTION>

                                                                Three Months Ended
                                                                    March 31,
                                                              2000               1999
<S>                                                          <C>                <C>
CAT imputed                                                  $12,250            $16,312
MPCI                                                          69,934             62,280
Crop Hail and named perils                                    14,426             28,443
AgPI  (1)                                                         --                 --
                                                              96,611            107,035
Less:  CAT imputed                                           (12,250)           (16,312)
                                                             $84,360            $90,723
(1) Represents discontinued product sold in 1998.
</TABLE>

Other gross written  premiums were $290,000 for the three months ended March 31,
2000  compared  to  $128,000  for the same  periods in 1999 due to the effect of
endorsements and cancellations on a run off book of business that was put in run
off in 1999.


<PAGE>


Net Premiums Written

MPCI  premiums are  considered  to be 100% ceded to the federal  government  for
accounting  purposes  and  therefore  no net written  premiums  result from MPCI
business.  Quota share  cession rates for other lines of insurance for the three
months ended March 31 are as follows:

                                                2000               1999

Nonstandard automobile                           22%                 0%
Crop Hail                                        45%                62%
Named peril                                      50%                50%

To address writing ratio and other statutory surplus concerns, the Company ceded
a portion of its automobile  business  effective  January 1, 2000. The reinsurer
has an A.M. Best rating of A++. Based on 1999 results, IGF has decided to retain
more risk on the crop hail line of business resulting in a decrease in the quota
share cession rate.

Fee Income

Fee income  declined 15.1% for the three months ended March 31, 2000 as compared
to the  first  quarter  of 1999 due to the  overall  decrease  in gross  written
premium volume.

Net Investment Income

Net investment  income  decreased 7.4% for the three months ended March 31, 2000
as compared to the corresponding period of the prior year. This decrease was due
to a decrease in the size of the  investment  portfolio  and lower yields on the
remaining investments.

Loss and Loss Adjustment Expense

The loss and LAE ratio for the Company's  nonstandard auto segment for the three
months ended March 31, 2000 was 86.5% of net premiums  earned.  The loss and LAE
ratio for 1999 is not meaningful due to unusual one time AgPI losses and related
reinsurance  costs.  During the first  quarter of 2000 the  Company  experienced
favorable  development  on its loss and LAE reserves for accidents  occurring in
1999 and prior.  This  reduced the  nonstandard  auto loss and LAE ratio for the
quarter by 1.0%.

The loss and LAE ratio for the Company's  crop  insurance  segment for the three
months  ended March 31, 2000,  was 83.2% of net  premiums  earned as compared to
14.0% for first  quarter 1999 and to 240.3% for the entire year of 1999.  During
the  first  quarter  of 2000 the  Company  experienced  $0.6  million  favorable
development on its loss and LAE reserves for losses occurring in 1999 and prior.
This reduced the crop insurance loss and LAE ratio for the quarter by 20.9%.

Policy Acquisition and General and Administrative Expenses

Policy acquisition and general and administrative  expenses were $14,938,000 and
$11,630,000  or 31.5% and 17.3% of net premium earned for the three months ended
March 31, 2000 and March 31, 1999,  respectively.  Overall expenses in the first
three  months  of 2000  versus  the first  three  months  of 1999  increased  by
$3,308,000.  Within this increase crop  expenses  increased by $4,216,000  while
nonstandard auto expenses decreased by $2,036,000.

The  expense  ratio for the  nonstandard  auto  segment  was 40.8% for the first
quarter  of 2000  as  compared  to 30% in  1999.  The  expense  ratio  increased
primarily due to a 34.2%  decrease in net premiums  earned  comparing  March 31,
2000  to  March  31,  1999.  Nonstandard  auto  expenses  were  $17,559,000  and
$19,595,000 or a $2,036,000 decrease (10.4%) for the three month ended March 31,
2000 and March 31,  1999,  respectively.  The  decrease in expenses is primarily
attributable  to the ceding  commission  received from the quota share agreement
effective January 1, 2000.


<PAGE>


Crop segment expenses include agent commissions, stop loss reinsurance costs and
operating  expenses  which are offset by MPCI  expense  reimbursements  and MPCI
underwriting  gain. The underwriting gain is an estimate until later in the year
when crops are harvested and losses are known.  The estimated  year to date gain
ratio in 2000, as well as for 1999, was 13.6% on gross premium. The underwriting
gain  increased in 2000 due to the fact that the crops  covered by MPCI policies
are  estimated  to have  average to above  average  yields this year.  The 13.6%
estimate is in line with actual annual results over the past four years.

Provision (Benefit) for Income Taxes

The current provision primarily consists of a write off of a refund being denied
by the IRS offset by a refund  received in the first quarter of 2000 relating to
a 1998 net  operating  loss.  At March 31, 2000 the companies net tax assets are
fully  offset by a 100%  valuation  allowance  which  resulted in no tax benefit
being reflected for the three months ended March 31, 2000.

REVIEW OF CONSOLIDATED FINANCIAL CONDITION

Investments

Total  investments as of March 31, 2000 and December 31, 1999 were  $219,005,000
and $231,424,000, respectively. Composition of investments is comparable between
these periods.  The Company's  market risk exposure has not  materially  changed
since prior year end.

Cash and Cash Equivalents

Total cash and cash  equivalent  balances as of March 31, 2000 and  December 31,
1999 were $32,850,000 and $32,874,000, respectively.

Investments in and Advances to Related Parties

Investments  in and advances to related  parties  increased  from  $1,646,000 at
December 31, 1999, to $1,853,000 at March 31, 2000.

Accounts Receivable Net of Allowance For Doubtful Accounts

Receivables  net of  allowances  for doubtful  accounts as of March 31, 2000 and
December 31, 1999 were  $125,547,000  and  $92,446,000,  respectively.  The crop
portion of the net  receivable  balances as of March 31, 2000 and  December  31,
1999 were $56,574,000 and $23,924,000,  respectively.  However, the crop portion
of the receivable  balance is more comparable to the balance of $106,812,000 for
the  period  ended  March 31,  1999.  This  decrease  is due to a portion of the
reinsurance balances being applied to the reinsurance payables liability balance
in 1999.

Nonstandard auto receivable  balances net of allowance for doubtful  accounts as
of March 31,  2000 and  December  31,  1999 were  $64,216,000  and  $62,299,000,
respectively.

Reinsurance Recoverables and Prepaid Reinsurance Premiums

Reinsurance  recoverables  were $44,540,000 and $88,293,000 as of March 31, 2000
and December 31, 1999, respectively. However the reinsurance recoverable balance
is more effectively compared to the March 31, 1999 balance of $60,459,000.  This
is  primarily  due to the  cyclical  nature of the crop  business.  Of the total
reinsurance  recoverable balance, as of March 31, 2000 and 1999, $25,756,000 and
$28,245,000,  respectively  pertain  to  crop  business.  The  nonstandard  auto
recoverables  were $10,558,000 and ($1,353,000) for the periods ending March 31,
2000 and 1999, respectively.  The nonstandard auto increase is attributable to a
quota share agreement that was effective January 1, 2000.

Prepaid  reinsurance  premiums were  $94,026,000 and $10,259,000 as of March 31,
2000  and  December  31,  1999,  respectively.  This  prepaid  balance  is  more
effectively  compared to the March 31, 1999 balance of $78,378,000.  The prepaid
reinsurance  balance is affected  by the  cyclical  nature of the crop  business
reinsured. Crop prepaid reinsurance premiums totaled $75,431,000 and $73,124,000
as of March 31, 2000 and 1999,  respectively.  Prepaid  reinsurance  premiums on
nonstandard auto totaled $17,826,000 and $463,000 as of March 31, 2000 and 1999,
respectively.  The increase in nonstandard auto is attributable to a quota share
that was effective January 1, 2000.


<PAGE>


Deferred Policy Acquisition Costs

Deferred policy  acquisition costs ("DAC") as of March 31, 2000 and December 31,
1999, were  $12,490,000 and $13,920,000  respectively.  Although these costs are
comparable,  the Company believes the ratio of DAC to net unearned premium would
be more  comparable  using prior year to date  comparisons.  DAC as of March 31,
1999 was $15,352,000.  DAC was primarily  composed of DAC on nonstandard auto at
March 31, 2000 and 1999 of $11,550,000 and $14,372,000,  respectively. The ceded
deferred  costs on nonstandard  auto at March 31, 2000 and 1999 were  $3,124,000
and $0, respectively.  DAC for nonstandard auto as compared with nonstandard net
unearned  premiums of $66,792,000 and $90,531,000 were 17.3% and 15.9% as of the
above dates, respectively. DAC for crop insurance at March 31, 2000 and 1999 was
$940,000  and  $535,000,  respectively.  In the last quarter of 1999 the Company
changed its method of  calculating  the auto deferred  policy costs by including
investment income in the computation.

Federal Income Taxes

Federal income taxes  recoverable were $0 and $6,820,000 at March 31, 2000 and
December 31, 1999.  The 1999 balance  consists of amounts  recoverable  from the
1997  tax  year due to tax  losses  generated  in  1999.  All  receivables  were
collected  during the first quarter of 2000. No further  recoveries are expected
or available resulting in a $0 balance forward.

The deferred  income tax asset balance of $0 as of March 31, 2000 has decreased
from $2,544,000 at March 31, 1999 because of a 100% valuation  allowance of all
deferred tax assets effective December 31, 1999.

Capital Assets

Capital Assets,  net of accumulated  amortization,  decreased $690,000 over year
end 1999. This change is primarily due to disposals and amortization.

Intangible Assets

The balance in the intangible  assets  increased from year end 1999 due to the
addition of intangibles in IGF, net of amortization expense. Intangible assets
include  goodwill from the acquisition of Superior,  additional  goodwill from
the  acquisition  of  the  minority  interest  in  Superior   Insurance  Group
Management,  Inc. and NACU,  debt or  preferred  security  issuance  costs and
organizational costs.

Loss and Loss Adjustment Expense Reserves

Total loss and loss adjustment  expense reserves  decreased from $219,918,000 as
of December 31, 1999 to $174,136,000 as of March 31, 2000. The total decrease in
loss and loss adjustment expense reserves is approximately $45,782,000.

Nonstandard  auto  reserves  declined  $7.8 million  during the first quarter of
2000; this decrease is consistent with the declining  volume in nonstandard auto
business.  Reserves for crop  insurance  declined $34.8 million during the first
quarter  of 2000 due to the  seasonal  nature  of the  business.  The  remaining
reserve  decrease of $2.0 million resulted  from  favorable  settlement  of
outstanding claims on surplus line  policies.  Because most of the  outstanding
liabilities from this business are reinsured,  the favorable  development has
minimal impact on the Company's net income.

Unearned Premium

The unearned  premium reserve  increased by $75,795,000 from December 31,1999 to
March 31, 2000.  Gross unearned  premium was  $165,802,000 and $90,007,000 as of
March 31, 2000 and December  31,  1999,  respectively.  However,  this  unearned
premium  balance is more  effectively  compared to the March 31, 1999 balance of
$176,022,000  due to the cyclical nature of the crop business.  Crop unearned as
of  March  31,  2000  and  March  31,  1999  was  $80,133,000  and  $77,363,000,
respectively. Crop unearned increased by $2,770,000 or 3.6% from March 31, 1999.
This was primarily due to an increase in crop hail written  premium for the same
period.  Unearned on nonstandard auto decreased  $6,262,000 or 6.9% for the same
period.  This was primarily due to the decrease in nonstandard  premiums written
for the respective  quarter ended March 31, 2000.  Unearned for nonstandard auto
was $84,733,000 and $90,955,000 as of March 31, 2000 and March 31, 1999.

Reinsurance Payables

Reinsurance  payables  increased by $47,248,000  from December 31, 1999 to March
31,  2000  due to the  cyclical  nature  of the  crop  business.  Crop  payables
increased from year end by $19,551,000 through March 31, 2000.  Nonstandard auto
increased  by  $24,854,000  from  December  1999 due to a quota share  agreement
effective January 1, 2000.


<PAGE>


Notes Payable

Notes payable  include the IGF Revolver which on December 31, 1999 and March 31,
2000 had an outstanding balance of $15,000,000 and $0, respectively. This change
in the  balance  is due to the fact  that  IGF  primarily  depends  upon the IGF
Revolver to meet its seasonal needs for liquidity.  The average interest rate on
the IGF  Revolver  was 6.75% for the nine months  ended March 31, 1999 and 7.91%
for the three months ended March 31, 2000.

Notes  payable also  include a $1,000,000  note due 2001 on the purchase of NACU
which bears no interest. The balance of notes payable at March 31, 2000 consists
of three smaller notes (less than $300,000  each) assumed in the  acquisition of
NACU which have  various due dates from 2002 to 2006 with  periodic  payments at
interest rates ranging from 7% to 9.09%.

Other Liabilities

Other  liabilities  decreased by $9,347,000  from December 31, 1999 to March 31,
2000. However,  payables as of March 31, 2000 of $19,196,000 are more comparable
to payables of  $26,292,000  as of March 31, 1999. The payables tend to be lower
at March 31 due to the  cyclical  nature of the crop  business  and the  related
overall effect on cash flow in the consolidated business.

Shareholders' (Deficit)
Shareholders'  (deficit) has increased  $3,661,000  from December 31, 1999. This
increase is primarily the result of the net loss of  $(3,412,000)  for the three
months ended March 31, 2000.

 LIQUIDITY AND CAPITAL RESOURCES

The Company's nonstandard  automobile insurance  subsidiaries' primary source of
funds are premiums,  investment income and proceeds from the maturity or sale of
invested  assets.  Such funds are used  principally  for the  payment of claims,
payment of claims settlement costs,  operating  expenses  (primarily  management
fees),  commissions  to  independent  agents,  dividends  and  the  purchase  of
investments.  There is  variability  to cash outflows  because of  uncertainties
regarding settlement dates for liabilities for unpaid losses.  Accordingly,  the
Company maintains  investment programs intended to provide adequate funds to pay
claims.  During 1999, the Company liquidated some investments to pay claims. The
Company  historically  has tried to  maintain  duration  averages  of 3.5 years.
However,  the  losses in 1999 and the first  quarter  of 2000  have  caused  the
Company  to shorten  the  duration  averages.  The  Company  may incur a cost of
selling longer bonds to pay claims. Claim payments tend to lag premium receipts.
Due to losses,  the  Company  has  experienced  a  reduction  in its  investment
portfolio but to date has not experienced  any problems  meeting its obligations
for claims payments.

Cash flows in the Company's crop insurance  subsidiary  (which is primarily MPCI
business)  differ  from cash flows from  certain  more  traditional  lines.  The
Company pays insured  losses to farmers as they are incurred  during the growing
season, with the full amount of such payments being reimbursed to the Company by
the federal  government  within  three  business  days.  MPCI  premiums  are not
received  from  farmers  until  covered  crops  are  harvested.   Collected  and
uncollected premiums are required to be paid in full

The Company itself relies  primarily on the payment of management  fees from its
insurance  subsidiaries  as a source of cash flow.  The Company has deferred the
semi-annual trust preferred payment because its nonstandard auto operations have
not  generated  sufficient  cash to both  provide  funding  for  these  interest
payments  and  maintain  sufficient  cash  liquidity  for the  nonstandard  auto
operations.

The trust indenture for the Preferred  Securities  contains certain  restrictive
covenants.  Certain of these covenants are based upon SIG's consolidated
coverage ratio of earnings before interest, taxes, depreciation and amortization
(EBITDA)  whereby if the SIG's  EBITDA  falls below 2.5 times  consolidated
interest  expense  (including  Preferred  Security  distributions)  for the most
recent four quarters, the following restrictions become effective:

o        SIG may not incur additional indebtedness or guarantee
         additional indebtedness.

o        SIG may not make certain  restricted  payments  including
         loans or advances to affiliates,  stock repurchases and a limitation on
         the amount of dividends is in force.

o       SIG may not increase its level of  non-investment  grade
        securities defined as equities,  mortgage  loans,  real estate,
        real estate loans and non-investment grade fixed income securities.

These restrictions  currently apply as SIG's consolidated coverage ratio
was (5.00) in March 31,  2000,  and will  continue to apply until SIG's
consolidated coverage ratio exceeds the amount set forth in the indenture.

The  Company's  consolidated  total  assets of  $574,246,000  at March 31,  2000
increased  $54,324,000 from the balance at December 31, 1999. The primary reason
for this increase was an increase in receivable balances and prepaid reinsurance
premiums which are impacted by the cyclical nature of the crop/hail business.

As of March 31, 2000, the Company had  $32,850,000of  cash, cash equivalents and
short-term  investments  available to meet short-term operating cash needs. This
was a decrease of $24,000 from the December 31, 1999 balance.

The Company's portfolio of fixed maturities reduced to $158,303,000 at March 31,
2000 from $166,748,000 and $196,916,000 at December 31, 1999 and March 31, 1999,
as a result of the sale of fixed maturities to fund operating losses.

Net cash used in operating  activities to March 31, 2000  aggregated  $2,241,000
compared to cash provided  from  operations of  $10,649,000  for the  comparable
period in 1999 due to the  effect of  operating  losses  offset by net cash from
changes in operating assets and liabilities.

Net cash provided from investing  activities of $12,146,000 for the three months
ended  March  31,  2000  compared  to  cash  used  in  investing  activities  of
$11,310,000  for the comparable  period in 1999. Such increase was due primarily
to a reduction in the purchases of fixed maturities.

Overall,  operating  cash flow for the  Company and its  insurance  subsidiaries
combined with the  availability of short term investments and the liquidation of
certain   fixed   maturity   investments   continues  to  be  adequate  to  meet
policyholders  needs for claims and other needs. The Company believes these cash
flows will continue to be adequate through year end.

The IGF Revolver has been extended  through  December 15, 2000.  IGF relies upon
the IGF Revolver to meet seasonal needs for  liquidity.  The maximum amount that
may be borrowed on the IGF Revolver is $8,000,000.


<PAGE>


ITEM 3.  QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK
Information  related to Qualitative and  Quantitative  Disclosures  about Market
Risk was included  under Item 1. Business in the December 31, 1999 Form 10-K. No
material  changes  have  occurred  in market  risk  since this  information  was
disclosed in the December 31, 1999 Form 10-K.

PART II -         OTHER INFORMATION
ITEM 1.  LEGAL PROCEEDINGS

                  There have been no material developments in any of the pending
                  legal  proceedings  previously  reported  by  the  Company  in
                  December 31, 1999 Form 10-K.

                  The  Company's  insurance  subsidiaries  are  parties to other
                  litigation  arising in the ordinary  course of  business.  The
                  Company  believes  that  the  ultimate   resolution  of  these
                  lawsuits  will  not  have a  material  adverse  effect  on its
                  financial  condition  or results of  operations.  The Company,
                  through its claims  reserves,  reserves for both the amount of
                  estimated  damages  attributable  to  these  lawsuits  and the
                  estimated costs of litigation.

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
                  On March 22, 2000, SIG received notice from Nasdaq - Amex that
                  the Listing  Qualifications Panel (the "Panel") has determined
                  that  SIG  was  not  in   compliance   with  certain   listing
                  qualifications.  On or before June 30, 2000,  SIG must
                  make a  filing  with  the SEC  and  Nasdaq  - Amex  evidencing
                  complete compliance with the required qualifications including
                  net tangible  assets  excluding  preferred  securities,  of at
                  least  $15,000,000,  market  value of public float of at least
                  $5,000,000 for a period of ten  consecutive  days  immediately
                  thereafter,   and  a   minimum   $1.00  per  share  bid  price
                  requirement. In the event that SIG fails to comply with any of
                  the  terms of these  requirements,  SIG's  securities  will be
                  delisted from The Nasdaq National Market. SIG has appealed the
                  decision of the Panel and expects to receive a decision on the
                  appeal in  September,  2000.  It is unlikely  that SIG
                  will meet all of the listing requirements by June 30, 2000. In
                  the event that SIG's  common  stock is  delisted,  the Company
                  expects  that its  common  stock may then be traded on the OTC
                  Bulletin Board.

                  On May 9, 2000, the Company received notice from from Nasdaq -
                  Amex that the Listing  Qualifications  Panel (the "Panel") has
                  determined that the Company was not in compliance with certain
                  listing  qualifications.  On or  before  June  30,  2000,  the
                  Company  must  make a filing  with  the SEC and  Nasdaq - Amex
                  evidencing    complete    compliance    with   the    required
                  qualifications   including  net  tangible   assets   excluding
                  preferred securities, of at least $15,000,000, market value of
                  public  float  of at  least  $5,000,000  for a  period  of ten
                  consecutive days immediately  thereafter,  and a minimum $1.00
                  per share bid price requirement. In the event that the company
                  fails to comply  with any of the terms of these  requirements,
                  the  Company's  securities  will be  delisted  from the Nasdaq
                  National Market. It is unlikely that the Company will meet all
                  of the listing  requirements  by June 30,  2000.  In the event
                  that the company's  securities  are delisted,  it expects that
                  its common stock may then be traded on the OTC Bulletin Board.


<PAGE>



ITEM 6.  EXHIBITS AND REPORTS ON FORM 8-K

(a)      Exhibits:

         Exhibit 11.01 Analysis of Earnings Per Share US GAAP - Treasury Method

(b)      8-K Reports:
         During the first  quarter of 2000,  the  Company  filed no reports
         on Form 8-K.


<PAGE>


SIGNATURES

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: May 15, 2000                                  By:______________________
                                                        Alan G. Symons
                                                        Chief Executive Officer



Dated: May 15, 2000                                  By: ______________________
                                                         Bruce K. Dwyer
                                                         Vice President and
                                                         Chief Financial Officer