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 March 31, 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                 No


As of March 31, 1997, there were 5,569,652  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, 1997
                                                                  Page
                                                                 Number

PART 1  FINANCIAL INFORMATION

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

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

        Consolidated Statements of Earnings for the Three
        Months Ending March 31, 1997 and 1996.................      6

        Consolidated Statements of Changes in Cash Resources
        for the Three Months Ending March 31, 1997 and 1996...      7

           Consolidated Statements of Retained Earnings for
           the Three Months Ending March 31, 1997 and 1996....      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....................................................     24


<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 months ended March 31, 1997 and
1996 are not necessarily indicative of the results to be expected for the entire
year.

These quarterly interim financial statements are unaudited.

                                      -3-

<PAGE>



GORAN CAPITAL INC 
CONSOLIDATED BALANCE SHEETS


                                     
                                     
ASSETS                                        March 31,          December 31,
Cash and Investments                               1997                  1996
Accounts Receivable                                                          
  Premiums Receivable                      $227,810,309          $206,670,797
  Due From Insurance Companies                                               
  Due From Associated Companies             113,456,874            63,873,697
  Accrued and Other Receivables              19,520,005            33,905,128
  Sub-total                                      96,848               140,423
Reinsurance recoverable on                    4,288,682             3,329,893
outstanding claims                          137,362,408           101,249,141
Prepaid reinsurance premiums                                                 
Capital Assets                               28,236,000            33,112,946
Other Assets                                 50,642,000            14,983,097
Deferred Policy Acquisition Costs             5,472,848             4,801,086
Goodwill                                      2,934,439             5,335,477
Total Assets                                 13,931,934            13,859,492
LIABILITIES                                   1,595,000             1,329,736
Accounts Payable                            467,984,939           381,341,772
  Due to Insurance Companies                                                 
  Accrued and Other Payables                                                 
  Sub-total                                  52,035,721             5,754,831
                                             26,117,824            21,050,919
                                             78,153,545            26,805,751
                                        
                                      -4-                                      
                                             
<PAGE>



Capital Assets                               5,472,848               4,801,086
Other Assets                                 2,934,439               5,335,477
Deferred Policy Acquisition Costs           13,931,934              13,859,492

                                             March 31,            December 31,
                                                  1997                    1996
Outstanding Claims                         110,415,929             127,044,804
Unearned Premiums                          132,480,197              91,206,974
Bank Loans                                  48,000,000              48,000,000
Minority Interest in Subsidiary             46,971,567              41,026,354
Total Liabilities                          416,021,238             334,083,883
SHAREHOLDERS' EQUITY
Capital Stock                               17,427,651              17,416,431
Contributed Surplus                          2,774,606               2,774,606
Retained Earnings                           32,008,130              27,401,236
Cumulative Translation Adjustment            (246,686)               (334,384)
Total Shareholders' Equity                  51,963,700              47,257,890
Total Liabilities and Shareholders'
Equity                                     467,984,939             381,341,772
See Notes to Consolidated Financial
Statements


                                      -5-

<PAGE>



GORAN CAPITAL INC.
CONSOLIDATED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDING


                                                   March 31,         March 31,
                                                        1997              1996

Gross Premiums Written                          $130,304,239       $41,421,617
Net Premiums Earned                               65,638,975        24,518,311
Net Investment and Other Income                    9,273,846         1,463,249
Total Revenues                                    74,912,821        25,981,559
Net Claims Incurred                               46,686,018        16,597,102
General and Administrative Expenses               14,428,499         5,992,803
Interest Expense                                   1,371,000           337,059
Total Expenses                                    62,485,518        22,926,964
Income Before Undernoted Items                    12,427,303         3,054,595
Provision for Income Taxes                         4,108,409           851,069
Minority Interest                                  3,712,000                 0
Net Earnings                                       4,606,894         2,203,526
Earnings Per Share - Basic                             $0.83             $0.43
Earnings Per Share - Fully Diluted                     $0.82             $0.40

See Notes to Consolidated Financial Statements

                                      -6-

<PAGE>



GORAN CAPITAL INC.
CONSOLIDATED STATEMENTS OF CHANGES IN
CASH RESOURCES
FOR THE THREE MONTHS ENDING


                                                     March 31,       March 31,
                                                          1997            1996
CASH PROVIDED BY OPERATING ACTIVITIES
Net Earnings For The Period                         $4,606,894      $2,203,526
Items Not Affecting Cash Resources:
  Amortization                                         517,840          29,470
  Loss (Gain) on Disposal of Investments             (957,720)        (35,631)
  Minority Interest in Net Income of                 3,712,000               0
  Consolidated Subsidiary
  Decrease (Increase) in Reinsurance                 4,876,946       8,743,638
  Recoverable on Outstanding Claims
  Decrease (Increase) in Prepaid Reinsurance      (35,658,903)    (18,483,679)
  Premiums
  Decrease (Increase) in Other Assets                2,401,038     (1,802,826)
  Decrease (Increase) in Deferred Policy              (72,442)         798,564
  Acquisition Costs
  Decrease (Increase) in Goodwill                    (265,264)               0
  Increase (Decrease) in Deferred Income                     0          18,195
  Taxes
  Increase (Decrease) in Unearned Premiums          41,273,223      19,377,162
  Increase (Decrease) in Outstanding Losses       (16,628,875)    (11,529,006)
  Decrease (Increase) in Accounts Receivable      (36,113,267)       3,539,274
  Increase (Decrease) in Accounts Payable           51,347,794       (420,052)
  Sub-Total                                         19,039,264       2,438,634
FINANCING ACTIVITIES:
  Increase (Reduction) of Borrowed Funds                     0     (5,523,782)
  Increase (Decrease) in Minority Interest           2,304,000               0
  Issue of Share Capital                                11,220         160,753
  Sub-Total                                          2,315,220     (5,363,028)


                                      -7-

<PAGE>



  Amortization                                         517,840          29,470
  Loss (Gain) on Disposal of Investments             (957,720)        (35,631)
  Minority Interest in Net Income of                 3,712,000               0
  Consolidated Subsidiary
  Decrease (Increase) in Reinsurance                 4,876,946       8,743,638
  Recoverable on Outstanding Claims

                                                     March 31,       March 31,
                                                          1997            1996
INVESTING ACTIVITIES:
  Net Purchase of Marketable Securities           (16,257,262)     (3,098,119)
  Net Purchase of Capital Assets                   (1,025,084)         476,700
  Other                                                 87,698          61,937
  Sub-Total                                       (17,194,648)     (2,559,482)
Effect of Exchange Rate Changes on Cash
Resources
Change in Cash Resources During the Period           4,159,836     (5,483,877)
Cash Resources, Beginning of Period                 33,730,582      10,613,027
Cash Resources, End of Period                       37,890,417       5,129,151
Cash Resources are Comprised of:
  Cash                                             $20,629,818    ($1,370,741)
  Short-Term Investments                            17,260,599       6,499,892
  Sub-total                                         37,890,417       5,129,151

See Notes to Consolidated Financial Statements




GORAN CAPITAL INC.
CONSOLIDATED STATEMENTS OF RETAINED EARNINGS


                                                   March 31,         March 31,
                                                        1997              1996
Retained Earnings (Deficit), Beginning of        $27,401,236      ($3,895,014)
Period
Net Earnings For The Period                        4,606,894         2,203,526
Retained Earnings (Deficit), End of Period        32,008,130       (1,691,488)


                                      -8-

<PAGE>



                               GORAN CAPITAL INC.
            CONDENSED NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                                   (UNAUDITED)
                    For The Three Months Ended March 31, 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  subsidiary,  IGF Insurance  Company
("IGF"), as well as its 52% owned subsidiaries,  Pafco General Insurance Company
("Pafco") and Superior  Insurance  Company  ("Superior")),  and its wholly-owned
subsidiaries,  Granite  Reinsurance  Company Ltd., Granite Insurance Company and
Symons  International  Group  -  Florida.  The  consolidated  condensed  interim
financial   statements   have  been  prepared  in  accordance   with  form  10-Q
specifications  and,  therefore,  do not include all  information  and footnotes
normally shown in full annual financial statements.

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 5. All material intercompany amounts have been eliminated.

NOTE 2 - ACQUISITION, FORMATION OF SUBSIDIARY AND PUBLIC OFFERING

In January,  1996, Pafco adopted a Plan of Reorganization whereby it transferred
its wholly owned subsidiary,  IGF, to Pafco's parent, SIG. After adoption of the
Plan of Reorganization in January, 1996, Pafco formed a wholly-owned subsidiary,
IGF  Holdings,  Inc.  ("IGF  Holdings")  and  formally  submitted  the  Plan  of
Reorganization to the Indiana  Department of Insurance for regulatory  approval.
Once approval was obtained from the Indiana Department of Insurance on April 26,
1996,  Pafco  transferred the outstanding  shares of the capital stock of IGF to
IGF  Holdings.  IGF  Holdings,  in turn,  made a  distribution  to Pafco of $7.5
Million in cash and a subordinated  promissory  note in the principle  amount of
$3.5 Million. Subsequent to that distribution, Pafco then completed the steps in
the Plan by  transferring  the  outstanding  capital  stock of IGF  Holdings  to
Pafco's parent, SIG.

SIG  purchased  Superior  from  Interfinancial,  Inc.  on April  30,  1996 for a
purchase  price of  approximately  $66  Million,  resulting  in  goodwill on the
transaction of approximately $1.3 Million.  Simultaneously with the execution of
the Superior  purchase  agreement,  Goran,  SIG, GGS Management  Holdings,  Inc.
("GGSH")  and GS Capital  Partners II,  L.P.,  a Delaware  limited  partnership,
entered into an agreement (the "GSCP Agreement") to capitalize GGSH and to cause
GGSH to issue its capital stock to SIG and to various funds affiliated

                                      -9-

<PAGE>



with Goldman  Sachs & Co.  (collectively,  "GS Funds"),  so as to give SIG a 52%
ownership interest and the GS Funds a 48% ownership  interest in GGSH.  Pursuant
to the GSCP Agreement, (a) SIG contributed to GGSH (i) Pafco common stock with a
book value  determined in accordance  with US GAAP of $16.9 Million as reflected
on an Audited  Post-Closing  Balance  Sheet of Pafco,  (ii) its right to acquire
Superior  pursuant to the Superior  Purchase  Agreement  and (iii) certain fixed
assets,   including   office   furniture  and  equipment,   having  a  value  of
approximately $350,000 and (b) the GS Funds contributed to GGSH $21.2 Million in
cash.

The  acquisition  of Superior was  accounted  for under the  purchase  method of
accounting,  and the results of its operations have been included  subsequent to
April 30, 1996.

On November 5, 1996, SIG  effectuated  an initial  public  offering of 3,450,000
common stock shares at $12.50 per share.  The proceeds of the offering were used
to  increase  the   capitalization  of  IGF  by  $9,000,000,   repay  $7,500,000
indebtedness  of  SIG,   primarily   certain  amounts  owed  to  Goran  and  its
wholly-owned  subsidiary,  Granite Re, repay a bank debt of  $7,500,000  and pay
Goran a dividend of  $3,500,000.  The remaining  funds were retained for general
corporate purposes, including acquisitions.

NOTE 3 - 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 government  Federal Crop Insurance  Corporation
("FCIC") program all of its Multi-Peril Crop Insurance  ("MPCI")  business which
has a  back-end  underwriting  gain  or  loss  feature.  The  Company  reinsures
stop-loss protection to third party reinsurers.  Regarding the crop hail line of
business,  the Company has placed a 40% quota share treaty, as well as 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  and  40%  of  its  crop  hail  business   under  certain  quota  share
arrangements.  The cession of nonstandard  automobile  premiums was necessary to
maintain  compliance with certain debt covenants regarding the ratio of premiums
to statutory surplus.

The effects of reinsurance on the Company's  premiums and claims incurred are as
follows:

                                      -10-

<PAGE>



NOTE 3
GORAN CAPITAL INC.
Analysis of Effects of Reinsurance


                                         March 31,               March 31,
                                              1997                    1996
Premiums Written
  Gross                                130,304,239              41,421,617
  Ceded                               (59,052,003)            (16,082,335)
  Net                                   71,252,236              25,339,282
Premiums Earned
  Gross                                127,336,975              47,952,143
  Ceded                               (61,698,000)            (23,433,832)
  Net                                   65,638,975              24,518,311
Claims Incurred
  Gross                                 61,757,629              29,068,982
  Ceded                               (15,071,611)            (12,471,880)
  Net                                   46,686,018              16,597,102

                                         March 31,            December 31,
                                              1997                    1996
Unearned Premiums
  Gross                                132,480,197              91,206,974
  Ceded                               (50,642,000)            (14,983,097)
  Net                                   81,838,197              76,223,877
Outstanding Claims
  Gross                                110,415,929             127,044,804
  Ceded                               (28,236,000)            (33,112,946)
  Net                                   82,179,929              93,931,858

NOTE 4 - CAPITAL STOCK

For the three months ended March 31, 1997,  163,832 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.


                                      -11-

<PAGE>



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:


                                                March 31,          March 31,
                                                     1997               1996
Reported Net Earnings                           4,606,894          2,203,526
US/Canada GAAP Differences
  Discounting on Outstanding Claims                38,277                  0
  Deferred Income Taxes                                 0             20,741
Revised Net Earnings                            4,645,171          2,224,267
Earnings Per Share                                  $0.78              $0.39
EPS - Before Extraordinary Items                    $0.78              $0.39
EPS - Fully Diluted                                 $0.78              $0.39
Dividends Per Share                                 $0.00              $0.00
Reported Total Assets                         467,984,939        164,089,609
US/Canada GAAP Differences
  Loans to Purchase Shares                      (588,745)          (559,680)
  Deferred Income Taxes                         2,161,000          1,499,561
  Unrealized Loss on Investments                (123,000)           (81,068)
Revised Total Assets                          469,434,194        164,948,423
Reported Shareholders' Equity                  51,963,700         14,940,270
US/Canada GAAP Differences
  Deferred Income Taxes                         2,161,000          1,499,561
  Discounting on Claims                       (1,209,998)        (1,318,777)
  Loans to Purchase Shares                      (588,745)          (559,680)
  Unrealized Gain (Loss) on Investments         (123,000)           (81,068)
Revised Shareholders' Equity                   52,202,957         14,480,306


                                      -12-

<PAGE>



NOTE 6 - 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.

One of the Company's  subsidiaries,  IGF, is the administrator of a run-off book
of business.  The FCIC has requested that IGF take responsibility for the claims
liabilities  of these  policies  under  its  administration.  IGF has  requested
reimbursement  of certain  expenses  from the FCIC with  respect to this run-off
activity.  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 these expenses.  The FCIC has  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.  While the final
result of this lawsuit cannot be predicted with certainty,  the Company believes
that the final  resolution  of this  lawsuit  will not have a  material  adverse
effect on the financial condition of the Company.

NOTE 7 - SUBSEQUENT EVENT

IGF has agreed to purchase  the  business of  Southwest  Crop  Managing  General
Agency ("Southwest"),  a subsidiary of Southwest Crop Insurance Company of Honey
Grove,   Texas.  The  Southwest  book  of  business  has  a  premium  volume  of
approximately $15 million.

                                      -13-

<PAGE>



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

The  Company  owns  52% of GGS  Management  Holdings,  Inc.  ("GGSH")  with  the
remainder  owned by certain funds  affiliated  with  Goldman,  Sachs & Co. GGSH,
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 that they 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

                                      -14-

<PAGE>



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.

Since 1990,  Congress  has  considered  major reform of its crop  insurance  and
disaster  assistance  policies,  resulting in the enactment of the 1994 and 1996
Reform Acts. The 1994 Reform Act required farmers for the first time to purchase
at least CAT Coverage in order to be eligible for other federally sponsored farm
benefits,  including  but not  limited  to low  interest  loans  and crop  price
supports.  The 1994 Reform Act also  authorized for the first time the marketing
and selling of CAT Coverage by the local USDA offices.  However, the 1996 Reform
Act  limits  the role of the  USDA  offices  in the  delivery  of MPCI  coverage
beginning in July,  1996,  which is the  commencement of the 1997 crop year, and
also eliminates the linkage between CAT Coverage and  qualification  for certain
federal farm program benefits. The limitation of the USDA's role in the delivery
system for MPCI  should  provide  the Company  with the  opportunity  to realize
increased revenues from the distribution and servicing of its MPCI product. As a
result of this limitation, the FCIC has transferred to the Company approximately
8,900 insureds for CAT Coverage who previously purchased such coverage from USDA
field offices.  The Company has not experienced any material  negative impact in
1997 from the  delinkage  mandated by the 1996 Reform Act. The Company  believes
that any future potential  negative impact of the delinkage mandated by the 1996
Reform Act will be  mitigated  by,  among other  factors,  the  likelihood  that
farmers  will  continue to purchase  MPCI to provide  basic  protection  against
natural  disasters  since ad hoc  federal  disaster  relief  programs  have been
reduced or eliminated.  In addition,  the Company believes that (i) many lending
institutions  will likely  continue to require  this  coverage as a condition to
crop  lending,  and (ii) many of the farmers  who entered the MPCI  program as a
result of the 1994 Reform Act have come to appreciate  the  reasonable  price of
the  protection  afforded  by CAT  Coverage  and will  remain  with the  program
regardless of delinkage.  There can, however, be no assurance as to the ultimate
effect which the 1996 Reform Act may have on the business or  operations  of the
Company.

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 1,200 independent agencies in 31 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 US generally  accepted  accounting
principles,  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

                                      -15-

<PAGE>



contrast,  net premiums  written do 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 generally accepted  accounting  principles 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
1997 and 1996, the Buy-Up Expense  Reimbursement Payment has been set at 29% and
31%,  respectively,   of  the  MPCI  Premium.  For  generally  accepted  account
principles 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.

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.

In addition to crop hail  insurance,  the Company  also sells a small  volume of
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

                                      -16-

<PAGE>



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 private  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 has in effect  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,  (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

                                      -17-

<PAGE>



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 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 months ended March 31, 1997, the Company  recorded net earnings of
$4,606,894 or $0.83 per share.  This is  approximately a 109% increase from 1996
comparable  amount of $2,203,526 or $0.43 per share. The improved  earnings were
attributable  to  continued  improvement  in  the  results  of  the  nonstandard
automobile  segment and  continued  growth and profit in the crop  segment.  The
nonstandard  automobile  segment  demonstrated  significant  improvement  due to
significantly  higher volume and improved  expense ratio from the acquisition of
Superior.  The crop segment also demonstrated strong premium growth and enhanced
profitability  due to higher volume as well as better loss  experience in winter
wheat.

                                      -18-

<PAGE>





                                                 For The Period Ended March 31,
                                                     1997                  1996
Nonstandard-Automobile Insurance             
Operations:
  Gross premiums written                       75,066,000            17,922,000
  Net premiums written                         59,588,000            20,167,000
  Net premiums earned                          63,105,000            13,626,000
  Net investment income                         2,338,000               396,000
  Other income, principally billing fees        2,899,000               591,000
  Net realized capital loss                       942,000              (52,000)
  TOTAL REVENUES                               69,284,000            14,561,000
  Losses and loss adjustment expenses          45,268,000             8,565,000
  Policy acquisition and general and           17,124,000             5,174,000
  administrative expenses
  Interest and amortization of                  1,484,000                     0
  intangibles
  TOTAL EXPENSES                               63,876,000            13,739,000
  Earnings before income taxes                  5,408,000               822,000
GAAP Ratios
(Nonstandard Automobile Only):
  Loss and LAE Ratio                                71.7%                 62.9%
  Expense ratio, net of billing fees                22.5%                 33.6%
  Combined ratio                                    94.2%                 96.5%


                                      -19-

<PAGE>


 
                                                 For The Period Ended March 31,
                                                     1997                  1996
Crop Insurance Operations:
  Gross premiums written                       51,709,000            21,404,000
  Net premiums written                          7,201,000               263,000
  Net premiums earned                              10,000               159,000
  Net investment income                            49,000               162,000
  Other income                                  2,139,000               373,000
  Net realized capital gain (loss)                      0                16,000
  TOTAL REVENUES                                2,198,000               710,000
  Losses and loss adjustment expenses                   0               397,000
  Policy acquisition and general and          (4,766,000)           (1,833,000)
  administrative expenses
  Interest expense                                 11,000                95,000
  TOTAL EXPENSES                              (4,755,000)           (1,341,000)
  Earnings before income taxes                  6,953,000             2,051,000
Statutory Capital and Surplus:
  Pafco                                        18,674,000            13,423,000
  IGF                                          33,003,000            10,488,000
  Superior                                     58,023,000            51,681,000

Consolidated  gross premiums written  increased 214.6% due to growth in both the
nonstandard auto and crop segments.

Gross premiums written for the nonstandard auto segment increased  318.8%.  Such
increase  was  due  primarily  to  gross  premiums   written  from  Superior  of
$56,925,000  for the three months ended March 31, 1997,  internal  growth due to
improved service,  certain product  improvements and tougher uninsured  motorist
laws in states such as California and Florida.

Gross premiums written for the crop segment increased 141.6%.  Such increase was
due to  continued  industry  privatization  and  aggressive  marketing  efforts.
Premiums  reported  in the first  three  months of each  year  generally  do not
include significant crop hail premiums since most of the policies are written in
the  second  quarter.  In  the  first  quarter  of  1997  the  Company  recorded
approximately $12,000,000 of crop hail gross premiums written as acreage reports
were processed faster than in prior years.

                                      -20-

<PAGE>



In 1997, the Company ceded  $15,477,000 of  nonstandard  automobile  premiums as
part of a 20% quota share treaty instituted  January 1, 1997. No such treaty was
in effect during 1996. Due to the growth in premiums and the  corresponding  lag
in statutory  earnings,  the Company's  subsidiaries  needed to cede premiums in
excess of a ratio to statutory surplus of 3.15:1 in order to maintain compliance
with debt covenants. The Company was in compliance with all debt covenants as of
March 31, 1997.  It is expected  that such cession will  continue as the Company
explores alternative financing plans.

Increases  in net  premiums  earned for the three months ended March 31, 1997 as
compared  to the  corresponding  period of the prior  year  reflects  the strong
growth in written  premiums offset by the effects of the nonstandard  automobile
quota share.

Net investment income increased  $3,042,388 for the three months ended March 31,
1997 as compared to the  corresponding  period of the prior year.  Such increase
was due  primarily  to  investment  income  from  Superior  of  $1,825,000.  The
remaining  increase was due to greater  invested  assets and  realized  gains on
investment  sales of $942,000 due primarily to a change in equity managers and a
repositioning of the portfolio.

Other income  increased  $4,768,209 for the three months ended March 31, 1997 as
compared to the corresponding period of the prior year. Such increase was due to
billing fee income on nonstandard  automobile business at Superior of $2,111,000
and due to an increase in the 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.

The loss  ratio  for the  nonstandard  automobile  segment  in 1997 was 71.7% as
compared to 62.9% in 1996. The increase in the loss ratio primarily reflects the
significant  growth in volume since the first  quarter of 1996 and has decreased
from  77.2% in the fourth  quarter of 1996 and 73.7% for all of 1996.  Crop hail
loss  ratios  in  the  first  quarter  do  not  have  a  significant  impact  on
consolidated earnings.

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 $14,428,499 or 22.0% of net premium earned for the three months
ended March 31, 1997 compared to  $5,992,803  or 24.4% of net premium  earned in
the  corresponding  period  of 1996.  There is a  disproportionate  relationship
between  increased  operating  expenses and increased net retention of business.
The expense ratio,  gross of billing fees, for the nonstandard  segment improved
to  27.1%  in 1997 as  compared  to 38.0%  in  1996,  due to  technological  and
operational efficiencies, economies of scale and tighter expense controls.

Due to the unique accounting for the crop insurance segment,  operating expenses
for the three months ended March 31, 1997 includes a contribution to earnings of
$4,766,000,  as compared to a comparable  amount of  $1,833,000  for 1996.  Such
increase was due to greater Buy-up Expense Reimbursement Payments

                                      -21-

<PAGE>



and  MPCI  underwriting  gain  due  to  increased  premium  volumes.   The  MPCI
underwriting  gain was also  increased  by improved  loss  experience  on winter
wheat.

Interest expense increased  $1,033,941 for the three months ended March 31, 1997
as  compared  to the  corresponding  period in the prior year due  primarily  to
interest  incurred  since April 30, 1996 on the $48 Million of debt  incurred to
purchase Superior.

The Superior  acquisition  debt is  effectively  fixed at 8.85% through  January
1997,  9.08%  through  April 1997,  9.24%  through July 1997,  and 8.80% through
October 1999 through an interest rate swap agreement.

Income tax expense  was 33.1% of pre-tax  income in 1997 as compared to 27.9% in
1996.  The  increase in the  effective  tax rate was due  primarily  to a higher
proportion of taxable U.S. earnings.

The remaining  operations of Goran (Granite  Reinsurance  Company Ltd.,  Granite
Insurance  Company  and Symons  International  Group,  Inc. - Florida)  provided
pre-tax earnings of approximately $640,000 in 1997 compared to $620,000 in 1996.

Financial Condition

The  Company's  total  assets  of  $467,984,939  at  March  31,  1997  increased
$86,643,167 from  $381,341,772 as of December 31, 1996. Cash and invested assets
increased to  $227,810,309  at March 31, 1997 from  $206,670,797 at December 31,
1996 due to improved cash flow from operations.

The Company's  shareholders'  equity  increased from $47,257,890 at December 31,
1996 to $51,963,700 at March 31, 1997.  Long term debt to equity was .53 to 1 at
December  31,  1996 and .48 to 1 at March 31,  1997.  Both  ratios  exclude  the
minority interest portion of long-term debt.

Net cash provided by operating  activities  improved to $19,039,000 in 1997 from
$2,439,000 in 1996 due to improved earnings and premium growth.  This additional
cash  flow was used to  increase  invested  assets.  The  contribution  from the
minority interest owner in 1997 was made to increase the capitalization of GGSH,
and the Company also contributed its 52% share.

                                      -22-

<PAGE>



PART II - OTHER INFORMATION

ITEM 1.       LEGAL PROCEEDINGS
              One of the Company's subsidiaries,  IGF Insurance Company ("IGF"),
              is the  administrator  of a run-off book of business.  The Federal
              Crop  Insurance  Corporation  ("FCIC") has requested that IGF take
              responsibility  for the claims liabilities of these policies under
              its  administration.  IGF has requested  reimbursement  of certain
              expenses from the FCIC with respect to this run-off activity.  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 (US) as reimbursement for these expenses. The
              FCIC has  counterclaimed  for approximately $1.2 million (U.S.) in
              claims payments for which the FCIC contends IGF is responsible for
              as  successor  to the run-off  book of  business.  While the final
              result of this litigation cannot be predicted with certainty,  the
              Company  believes  that the final  resolution of this lawsuit will
              not have a material  adverse effect on the financial  condition of
              the Company.

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

                    (a)  Exhibits
                            11.01   computation   of   earnings   per  share  in
                            accordance  with United  States  Generally  Accepted
                            Accounting Principles.

                    (b)  Reports on Form 8-K
                            (1) The  Company  filed a Form 8-K on April 4,  1997
                            relating  to  the   formation   of  GGS   Management
                            Holdings,  Inc.  and  the  acquisition  of  Superior
                            Insurance   Company  and  related   historical   and
                            pro-forma   financial   statements   of   businesses
                            acquired.

                            (2) The  Company  filed a Form 8-K on April 22, 1997
                            relating  to the  unaudited  pro-forma  consolidated
                            financial statements of operations of the Company.


                                      -23-

<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: March 31, 1997                             By:_/s/ Alan G. Symons______
                                                  Alan G. Symons
                                                  President




Dated:  March 31, 1997                            By:_/s/ Gary P. Hutchcraft___
                                                  Gary P. Hutchcraft
                                                  Vice President, Treasurer and
                                                  Chief Financial Officer



                                      -24-

<PAGE>


GORAN CAPITAL INC. - Consolidated                                 Exhibit 11.01
Analysis of Earnings Per Share
As At March 31, 1997


                                               March 31, 1997    March 31, 1996
TSE Trading    
Activity
                   Volume           Value      Average Price
Period Covered       #              (US $)         (US $)            (US $)
January to        633,310        $15,491,602       $24.46     (A)    $11.46
March 1997



                                        March 31, 1997           March 31, 1996
Proceeds from Exercise of               $3,533,293      (B)      $1,195,394
Warrants and Options (US $)
Shares Repurchased - Treasury              144,444    (B)/(A)       104,278
Method
Shares Outstanding - Weighted            5,533,776                5,085,046
Average
Add:  Options and Warrants                 545,317                  704,160
Outstanding
Less:  Treasury Method - Shares          (144,444)                (104,278)
Repurchased
Shares Outstanding for US GAAP           5,934,649      (C)       5,684,928
Purposes
Net Earnings in Accordance with         $4,645,171      (D)      $2,224,267
US GAAP
Earnings Per Share - US GAAP                 $0.78    (D)/(C)         $0.39
(Primary and Fully Diluted)



                                      -25-