<PAGE>

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549

                                    FORM 10-K

(Mark One)
[X]           Annual report pursuant to section 13 or 15 (d) of the
                         Securities Exchange Act of 1934

                  For the fiscal year ended December 31, 2002.

[_]        Transition report pursuant to section 13 or 15 (d) of the
                        Securities Exchange Act of 1934.

               For the transition period from _______ to ________.

                        Commission file number 000-28249

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

                         AMERINST INSURANCE GROUP, LTD.
             (Exact Name of Registrant as Specified in its Charter)

            BERMUDA                                         98-020-7447
(State or other jurisdiction of                          (I.R.S. Employer
 Incorporation or Organization)                         Identification No.)

c/o USA Offshore Management, Limited,
Windsor Place, 18 Queen Street, 2/nd/ Floor
PO Box HM 1601, Hamilton HM GX, Bermuda
(Address of Principal Executive Offices)                    (Zip Code)

       Registrant's telephone number, including area code: (441) 296-3973

        Securities registered pursuant to Section 12(b) of the Act: None

           Securities registered pursuant to Section 12(g) of the Act:
                    COMMON SHARES, PAR VALUE $1.00 PER SHARE
                                (Title of class)

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.

                                [X] YES   [_] NO

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [X]

Aggregate market value of the common stock held by non-affiliates of the
Registrant as of March 10, 2003 was $17,585,882.*

Number of common shares, $1.00 par value per share, outstanding as of March 10,
2003 was 304,887.

*based on book value as of December 31, 2002.

<PAGE>

                                     PART I

Item 1.  Business

General

     AmerInst Insurance Group, Ltd. ("AMIG Ltd." or the "Company") was formed
under the laws of Bermuda on July 16, 1998. AMIG Ltd.'s principal offices are
located at Windsor Place, 18 Queen Street, 2nd Floor, PO Box HM 1601, Hamilton
HM GX, Bermuda. On December 2, 1999, the Company and its predecessor entity,
AmerInst Insurance Group, Inc., a Delaware corporation ("AIIG"), consummated an
exchange transaction pursuant to an Exchange Agreement, in which AIIG
transferred all of its assets and liabilities to the Company in exchange for
newly issued common shares of the Company (the "Exchange"). AIIG was then
liquidated and AIIG shareholders received, on a share-for-share basis, the newly
issued common shares of AMIG Ltd.

     The primary purpose of AMIG Ltd. and its subsidiaries is to establish, for
the benefit of accounting firms which are shareholders of the Company, an
insurance company which over time could exert a stabilizing influence on the
design, pricing and availability of accountants' professional liability
insurance. The sole business activity of the Company's wholly owned subsidiary,
AmerInst Insurance Company, Ltd. ("AMIC Ltd.") is to act as a reinsurer of
professional liability insurance policies that are issued under the AICPA
Professional Liability Insurance Plan ("AICPA Plan" or "Plan"). The AICPA Plan
offers professional liability coverage to accounting firms in all 50 states.
Currently, approximately 23,000 accounting firms are insured under the Plan.

     The purposes for the formation and operation of AMIG Ltd. and its wholly
owned subsidiaries, AmerInst Mezco, Ltd. ("Mezco"), AmerInst Insurance Company,
Ltd. ("AMIC Ltd.") and AmerInst Investment Company, Ltd. ("Investco") was to
restructure AIIG's operations and change AIIG's domicile from Delaware to
Bermuda. The change of domicile and the related restructuring permitted AIIG to
reorganize its business activities to take maximum advantage of legal, financing
and tax environments. There were several factors that contributed to the
decision to carry out the restructuring and the change in domicile including,
without limitation, (i) the enhanced ability to purchase shares of shareholders
who have died or retired from the practice of accounting, as AIIG previously did
generally at 75% of book value as of the end of the preceding year, (ii) the
substantial elimination of double income taxation and (iii) Bermuda's standing
as a major reinsurance and financial center.

     In the future, AMIC Ltd. may want to expand its business, subject to any
required regulatory approvals, to include the reinsurance of other lines of
coverage. AMIG Ltd.'s purpose is more fully described in Note 1 of the audited
financial statements included herein.

     The reinsurance activity of AMIC Ltd. depends upon agreements entered into
with outside parties. From the inception of AIIG, AMIG Ltd.'s predecessor
entity, through mid-1993, Crum and Forster Managers Corporation, through a group
of affiliated insurance companies (collectively, "CGI"), was the primary insurer
for the AICPA Plan. In 1988, AIIG's wholly-owned subsidiary, AmerInst Insurance
Company Inc. ("AIIC") provided reinsurance to CGI, assuming 10% of the risks
related to the first $1,000,000 of coverage for each policy issued under the
program. For the period 1989 through mid-1993, an unaffiliated company, Virginia
Surety Company, Inc., ("VSC") provided reinsurance to CGI and retroceded a
portion to AIIC such that AIIC assumed 10% to 12.5% of the risk related to the
first $1,000,000 of coverage limits for each policy issued under the program. In
August 1993, the AICPA Plan endorsed the CNA insurance group as its insurance
carrier, replacing CGI as the primary insurer. AIIC then began a reinsurance
relationship with CNA, taking a 10% participation of the first $1,000,000 of
liability of each policy written under the plan. Effective in December 1999, the
Company began taking a 10% share of the "value plan" business from CNA, the
"value plan" provides for separate $1,000,000 limits for losses and separate
$1,000,000 limits for expenses. Additionally there is a separate $2,000,000
policy aggregates for combined losses and expenses.

     AIIC entered into excess of loss retrocession agreements to limit its
retained risk on any one claim underwritten by CGI to $50,000 in 1989 and 1990
and $62,500 in 1991 through mid-1993, subject to specified maximum recoveries
for each contract year. Retrocession premiums ceded by the Company are
adjustable within a specified range based on actual experience under each
contract. Retrocession transactions do not relieve AMIC Ltd. from its obligation
to the ceding companies.

                                        2

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Third-party Managers and Service Providers

     USA Offshore Management, Ltd. provides the day-to-day services necessary in
the administration of AMIG Ltd.'s, Mezco's, AMIC Ltd.'s and Investco's business.
Prior to the Exchange, these services were provided by USA Risk Group, an
affiliate of USA Offshore Management, through Vermont Insurance Management, Inc.

     The Country Club Bank of Kansas City, Missouri, provides portfolio
management of fixed-income securities and directs AMIG Ltd.'s investments
pursuant to guidelines approved by AMIG Ltd.'s board of directors. Harris
Associates L.P. and Northeast Investment Management, Inc. provide discretionary
investment advice with respect to AMIG Ltd.'s equity investments.

     Milliman USA (fka Milliman & Robertson, Inc.), (Liscord, Ward & Roy, Inc.
for year-ends prior to December 31, 1998) an independent casualty actuarial
consulting firm, has been retained by AMIC Ltd. to render advice regarding
actuarial matters.

     The law firms of Altheimer & Gray and Conyers, Dill and Pearman have been
retained to render advice on legal matters.

     Deloitte & Touche has been retained by AMIG Ltd. as its independent auditor
to audit its financial statements. Prior to the Exchange, Johnson Lambert & Co.
served as independent auditor for AIIG.

     Butterfield Corporate Services were retained effective January 1, 2001 to
provide share transfer agent and share registry services. Prior to January 1,
2001 Computershare, Inc provided these services.

Professional Liability Coverage

     The professional liability policy issued by CGI or CNA and ultimately
reinsured by AMIC Ltd. (the "Policy") is a Professional Liability Company
Indemnity Policy form.

     The coverage provided under the Policy is on a "claims made" basis, which
means the Policy covers only those losses resulting from claims asserted against
the insured during the policy period. The insuring clause of the Policy, which
indemnifies for losses caused by acts, errors or omissions in the insured's
performance of professional accounting services for others, is in three parts:

     Clause A indemnifies the accounting firm insured and, unless excluded by
endorsements, any predecessor firms;

     Clause B indemnifies any accountant or accounting firm while performing
professional accounting services under contract with the insured;

     Clause C indemnifies any former or new partner, officer, director or
employee of the firm or predecessor firms.

     Depending on the insured, defense costs for the policies issued by CNA (and
reinsured by AMIC Ltd.) are either within the policy limits or in addition to
policy limits. CNA charges additional premium to cover the cost of providing
defense costs in addition to the policy limits. Those insureds under the value
plan have separate limits for losses and defense costs. There are a few States
in which defense costs may not be included within the Policy limit. Settlements
are made only with the written consent of the insured. However, if the insured
contests the settlement recommended by the insurer, the Policy will only cover
costs that do not exceed the lesser of the amount for which the claim could have
been settled or the policy limits.

Competition

     The AICPA Plan's current major competition comes from three large,
established insurance companies, including the Plan's former carrier, CGI. A
number of smaller companies compete in the field, but none have significant
nationwide market share. Many of these companies charge lower premiums than the
Plan, which may provide different terms of coverage. The Plan's principal
competitive strength is its commitment to the use of large, financially strong
and experienced primary insurers

                                        3

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which enhance the Plan's capacity to continue to be a stable and dependable
source of coverage and to pay losses as they arise.

Licensing and Regulation

     The rates and terms of reinsurance agreements generally are not subject to
regulation by any governmental authority. This is in contrast to direct
insurance policies, the rates and terms of which are regulated by, or subject to
notice to, State insurance departments. As a practical matter, however, the
rates charged by primary insurers place a limit upon the rates that can be
charged by reinsurers.

     AMIG Ltd. and AMIC Ltd. are subject to regulation under the insurance laws
of Bermuda, where they are domiciled.

Bermuda Regulation

     AMIC Ltd., as a licensed Bermuda insurance company, is subject to
regulation under The Insurance Act 1978, as amended, and related regulations
(the "Bermuda Act"), which provides that no person shall conduct insurance
business, including reinsurance, in or from Bermuda unless registered as an
insurer under the Bermuda Act by the Supervisor of Insurance ("SOI"). In
deciding whether to grant registration, the SOI has discretion to act as he
thinks fit in the public interest. The SOI is required by the Bermuda Act to
determine whether an applicant for registration is a fit and proper body to be
engaged in insurance business and, in particular, whether it has, or has
available to it, adequate knowledge and expertise. In connection with
registration, the SOI may impose conditions relating to the writing of certain
types of insurance business.

     An Insurance Advisory Committee appointed by the SOI advises him on matters
connected with the discharge of his functions and sub-committees thereof
supervise and review the law and practice of insurance in Bermuda including
reviews of accounting and administrative procedures.

     The Bermuda Act requires, among other things, Bermuda insurance companies
to meet and maintain certain standards of solvency, to file periodic reports in
accordance with the Bermuda Statutory Accounting Rules, to produce annual
audited financial statements and to maintain a minimum level of statutory
capital and surplus. In general, the regulation of insurers in Bermuda relies
heavily upon the auditors, directors and managers of the Bermuda insurer, each
of which must certify each year that the insurer meets the solvency and capital
requirements of the Bermuda Act. Furthermore, the SOI is granted powers to
supervise, investigate and intervene in the affairs of insurance companies.
Significant aspects of the Bermuda insurance regulatory framework are set forth
below.

     An insurer's registration may be canceled by the SOI on certain grounds
specified in the Bermuda Act, including the failure of the insurer to comply
with the obligations of the Bermuda Act or if, in the opinion of the SOI after
consultation with the Insurance Advisory Committee, the insurer has not been
carrying on business in accordance with sound insurance principles.

     Every registered insurer must appoint an independent auditor approved by
the SOI who will annually audit and report on the statutory financial statements
and the statutory financial return of the insurer, which are required to be
filed annually with the SOI. The approved auditor may be the same person or firm
that audits the insurer's financial statements and reports for presentation to
its shareholders.

     An insurer must prepare annual statutory financial statements. The
statutory financial statements are not prepared in accordance with GAAP and are
distinct from the financial statements prepared for presentation to the
insurer's shareholders under the Companies Act 1981, as amended, of Bermuda (the
"Companies Act").

     The Bermuda Act provides that the statutory assets of an insurer must
exceed its statutory liabilities by an amount greater than the prescribed
minimum solvency margin. Pursuant to the Bermuda Act, AMIC Ltd. is registered as
a Class 3 insurer and, as such: (i) is required to maintain a minimum of
solvency margin equal to the greatest of : (x) $1,000,000, (y) 20% of net
premiums written in its current financial year up to $6,000,000 plus 15% of net
premiums written in its current financial year over $6,000,000, or (z) 15% of
loss reserves; (ii) is required to file annually with the SOI a statutory
financial return together with a copy of its respective statutory financial
statements which includes a report of the independent

                                        4

<PAGE>

auditor concerning the statutory financial statements of the insurer, a
declaration of the statutory ratios, and the related solvency certificate, and
an opinion of a loss reserve specialist in respect of its loss and loss expense
provisions, all within four months following the end of the relevant financial
year; (iii) is prohibited from declaring or paying any dividends during any
financial year if it is in breach of its minimum solvency margin or minimum
liquidity ratio or if the declaration or payment of such dividends would cause
it to fail to meet such margin or ratio (if it fails to meet its minimum
solvency margin or minimum liquidity ratio on the last day of any financial
year, the insurer will be prohibited, without the approval of the SOI from
declaring or paying and dividends during the next financial year); (iv) will be
prohibited, without the approval of the SOI from reducing by 15% or more its
total statutory capital, as set out in its previous year's financial statements;
and (v) if it appears to the SOI that there is a risk of AMIC Ltd. becoming
insolvent or that it is in breach of the Bermuda Act or any conditions imposed
upon its registration, the SOI may, in addition to the restrictions specified
above, direct AMIC Ltd. not to declare or pay any dividends or any other
distributions or may restrict it from making such payments to such extent as the
SOI may think fit.

     The Bermuda Act provides a minimum liquidity ratio for general business. An
insurer engaged in general business is required to maintain the value of its
relevant assets as not less than 75% of the amount of its relevant liabilities.
Relevant assets include cash and time deposits, quoted investments, unquoted
bonds and debentures, first liens on real estate, investment income due and
accrued, account and premiums receivable and reinsurance balances receivable.
There are certain categories of assets which, unless specifically permitted by
the SOI, do not automatically qualify as advances to affiliates, such as real
estate and collateral loans. The relevant liabilities are total general business
insurance reserves and total other liabilities less deferred income tax and
sundry liabilities (by interpretation, those not specifically defined). Based
upon the foregoing, AMIC Ltd.'s holding in Investco requires the specific
approval of the SOI, which it has received.

     The SOI may appoint an inspector with extensive powers to investigate the
affairs of an insurer if the SOI believes that an investigation is required in
the interest of the insurer's policyholders or persons who may become
policyholders. In order to verify or supplement information otherwise provided
to him, the SOI may direct an insurer to produce documents or information in
relation to matters connected with the insurer's business.

     If it appears to the SOI that there is a risk of an insurer becoming
insolvent or, if the insurer is in breach of the Bermuda Act and the regulations
or of any condition imposed on its regulation as an insurer, the SOI may direct
the insurer in certain respects, including not to take on any new insurance
business; not to vary any insurance contract if the effect would be to increase
the insurer's liabilities; not to make certain investments; to realize certain
investments; to maintain in, or transfer to and to keep in the custody of, a
specified bank, certain assets; not to declare or pay any dividends or other
distributions or to restrict the making of such payments; and/or to limit its
premium income.

     As a Bermuda insurer, AMIG Ltd. is required to maintain a principal office
in Bermuda and to appoint and maintain a principal representative in Bermuda.
For the purpose of the Bermuda Act, the principal office of the Company is
located at Windsor Place, 18 Queen Street, 2nd Floor, PO Box HM 1601, Hamilton
HMGX, Bermuda. The principal representative is USA Offshore Management Ltd.
Without a reason acceptable to the SOI an insurer may not terminate the
appointment of its principal representative, and the principal representative
may not cease to act as such, unless 30 days' notice in writing to the SOI is
given of the intention to do so. It is the duty of the principal representative,
within 30 days of his reaching the view that there is a likelihood of the
insurer for which he acts becoming insolvent or its coming to his knowledge, or
his having reason to believe, that an "event" has occurred, to make a report in
writing to the SOI setting out all the particulars of the case that are
available to him. Examples of such an "event" include failure by the insurer to
comply substantially with a condition imposed upon the insurer by the SOI
relating to a solvency margin or a liquidity or other ratio.

     The business of the Company and its subsidiaries is conducted from offices
in Hamilton, Bermuda. AMIC Ltd. conducts the casualty insurance underwriting
business previously conducted by AIIC. Investco and the Company conduct
investment business for their own accounts through investment advisors in the
U.S. or other investment

                                        5

<PAGE>

markets as needed and appropriate. Neither Investco nor the Company operate as
an investment manager or as a broker dealer requiring registration under
investment advisory or securities broker regulations in the U.S., Bermuda or
otherwise. The directors and officers of AMIC Ltd. negotiate reinsurance
treaties for acceptance in Bermuda. Among other matters, the following business
functions are conducted from the Bermuda offices at which the officers of AMIC
Ltd. and Investco are located: (i) communications with shareholders of the
Company, including the providing of financial reports; (ii) communications with
the general public of a nature other than advertising; (iii) solicitation of the
sale by the Company, AMIC Ltd. or Investco of shares in any of such entities;
(iv) accepting subscriptions of new shareholders of the Company; (v) maintenance
of principal corporate records and original books of account; (vi) audit of
original books of account; (vii) disbursement of funds in payment of dividends,
claims, legal fees, accounting fees, and officers' and directors' fees and
salaries; (viii) arrangement for and conduct of meetings of the shareholders and
directors of the Company, AMIC Ltd. and Investco; and (ix) execution of
redemptions of shares of stock of the Company, AMIC Ltd. and Investco. The
Company does not maintain an office or place of business in the United States.

     AMIC Ltd.'s ability to pay dividends to AMIG Ltd. is subject to the
provisions of the Bermuda insurance laws. Under Companies' Bermuda law, AMIC
Ltd. is prohibited from declaring or paying a dividend at December 31, 2002 if
such payment would reduce the realizable value of its assets ($53,335,167) to an
amount less than the aggregate value of its liabilities ($34,236,897) issued
share capital ($120,000) and share premium (additional paid-in capital in the
amount of $5,879,981) accounts. As at December 31, 2002, $13,098,289 was
available to stockholders.

     AMIG Ltd.'s ability to pay common shareholders' dividends and its operating
expenses is dependent on cash dividends from AMIC Ltd. including its subsidiary,
Investco (collectively the "reinsurance subsidiaries"). The payment of such
dividends by the reinsurance subsidiaries to AMIG Ltd. is limited under Bermuda
law by the Bermuda Insurance Act 1978 and related regulations as amended which
require that AMIC Ltd. maintain minimum levels of solvency and liquidity. For
the years ended December 31, 2002 and 2001 these requirements have been met as
follows:

                               Statutory
                           Capital & Surplus               Liquid Assets
                        Minimum          Actual        Minimum        Actual

December 31, 2002     $4,571,826      $16,005,873    $35,102,366   $62,809,027

December 31, 2001     $4,344,963      $17,214,779    $32,708,085   $60,825,559

Customers

     AMIC Ltd.'s only source of income, other than its investment portfolio, is
its reinsurance treaties. Without such reinsurance treaties, current levels of
investment income would provide enough revenue to continue operations while the
Company evaluated other reinsurance and insurance opportunities.

Employees

     AMIG Ltd., AMIC Ltd., Mezco and Investco have no employees. See Note 8,
Notes to the Consolidated Financial Statements.

Loss Reserves

     For information concerning AMIC Ltd.'s loss reserves, changes in aggregate
reserves for the last three years, and loss reserve development as of the end of
each of the last ten years, see Management's Discussion and Analysis of
Financial Condition and Results of Operation, Note 3 to the Consolidated
Financial Statements, and Note 6 to the Consolidated Financial Statements.

                                     PART II

Item 5.   Market for Registrant's Common Equity and Related Stockholder Matters

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<PAGE>

     There is no established public trading market for the common shares of AMIG
Ltd. AMIG Ltd.'s Bye-Laws provide that all transfers of common shares of AMIG
Ltd. must be approved by AMIG Ltd.'s Board of Directors or a committee thereof.
AMIG Ltd.'s Board of Directors has appointed a Shareholder Relations Committee
for purposes of reviewing and approving applications for transfer. All
transferees must meet the qualifications for share ownership contained in AMIG
Ltd.'s Share Ownership Policy.

     Notwithstanding the absence of a public market for its common shares, the
Company has a policy of having its subsidiary, AmerInst Investment Company, Ltd.
("Investco"), which holds almost all of the Company's investment portfolio,
redeem AMIG Ltd. shares owned by shareholders who have retired from the practice
of accounting or have died at 75% of net book value as of the preceding fiscal
year end.

     On June 1, 2000 the Board of Directors of Investco, which holds almost all
of the company's investment portfolio, authorized it to expend up to $1,000,000
to repurchase outstanding common shares of the Company. On September 8, 2000,
the Bermuda Monetary Authority authorized a purchase of up to 15,000 common
shares pursuant to the Board's authorization. Such purchases are affected
through privately negotiated transactions and are in addition to Investco's
practice of redeeming the shares of individuals who have died or retired from
the practice of public accounting. Subsequently, on July 19, 2002, the Bermuda
Monetary Authority authorized blanket permission for Investco to purchase Common
Shares from individuals who have died or retired from the practice of public
accounting and on a negotiated case-by-case basis without limit. To date,
Investco has purchased 15,075 Common Shares for a purchase price of $474,326. In
addition, to date, Investco has purchased 11,809 Common Shares from individuals
who have died or retired for a purchase price of $521,521.

     As of March 10, 2003, AMIG Ltd. had 2,429 holders of record of its common
shares. On August 28, 1995, the Board of Directors of AIIG adopted a dividend
policy for AIIG to pay a quarterly dividend of $0.65 per share subject to
legally available funds and specific Board approval for each quarter. During
2002, 2001 and 2000, AMIG Ltd. paid cash dividends of $803,430, $821,556 and
$855,681, respectively, representing four quarterly payments of $0.65 per share
in each year. The declaration of dividends by AMIG Ltd.'s Board of Directors is
dependent upon AMIG Ltd.'s and AMIC Ltd.'s capacity to insure or reinsure
business, profitability, financial condition, and other factors which the Board
of Directors may deem appropriate. For a description of the restrictions which
Bermuda law imposes on AMIC Ltd.'s ability to pay dividends, see Licensing and
Regulation above.

Item 6.   Selected Financial Data

     The following summary sets forth selected financial data with respect to
AMIG Ltd. for the five fiscal years ended December 31, 2002. The balance sheet
and income statement data have been derived from AMIG Ltd.'s consolidated
financial statements which have been audited, for fiscal years through 1998 by
Johnson Lambert & Co., AIIG's independent auditors and, for fiscal years 2002,
2001, 2000 and 1999 by Deloitte & Touche, AMIG Ltd.'s independent auditors. The
data set forth below should be read in conjunction with the audited financial
statements and notes thereto included elsewhere herein.

SELECTED FINANCIAL STATEMENT DATA

Income Statement Data

<TABLE>
<CAPTION>
                                                                                  RESTATED
                                                                                 ----------
                              2002           2001         2000         1999         1998
                          ------------   -----------   ----------  ------------  ----------
<S>                        <C>           <C>          <C>           <C>          <C>
Premiums Earned           $ 6,775,407    $ 6,400,322   $6,544,342  $ 6,388,323   $5,901,939
Net Investment Income       1,887,778      2,121,542    2,144,379    2,163,178    2,166,368
Net Realized Gain (Loss)   (1,005,185)       986,422     (168,819)     532,954      277,627
                          -----------    -----------   ----------  -----------   ----------
Total Revenue             $ 7,658,000    $ 9,508,286   $8,519,902  $ 9,084,455   $8,345,934
                          ===========    ===========   ==========  ===========   ==========
Net Income (Loss)         $  (741,560)   $   751,092   $ (648,013) $(1,438,024)  $1,061,530
                          ===========    ===========   ==========  ===========   ==========
Basic Earnings (Loss)
 Per Share                $     (2.40)   $      2.37   $    (1.98) $     (4.33)  $     3.19
                          ===========    ===========   ==========  ===========   ==========
Cash dividends declared
 per common share         $      2.60    $      2.60   $     2.60  $      2.60   $     2.60
                          ===========    ===========   ==========  ===========   ==========
</TABLE>

                                        7

<PAGE>

Balance Sheet Data

<TABLE>
<CAPTION>
Balance Sheet Data                                                                    RESTATED
                                                                                    -----------
                               2002           2001         2000          1999           1998
                           -----------    -----------   -----------   -----------   -----------
<S>                        <C>            <C>           <C>           <C>           <C>
Investments                $46,267,306    $46,085,433   $45,827,405   $39,281,257   $42,548,658
Other Assets                 5,947,257      6,759,060     4,903,333     8,021,904     7,232,788
                           -----------    -----------   -----------   -----------   -----------
Total Assets               $52,214,563    $52,844,493   $50,730,738   $47,303,161   $49,781,446
                           ===========    ===========   ===========   ===========   ===========
Losses and Loss
Adjustment Expenses        $30,478,843    $29,242,625   $27,703,085   $25,037,029   $21,718,087
Unearned Premiums            3,350,380      3,127,409     2,789,499     3,057,408     3,415,651
Other Liabilities              668,604        747,240     1,263,002       598,905     2,705,699
                           -----------    -----------   -----------   -----------   -----------
Total Liabilities           34,497,827     33,117,274    31,755,586    28,693,342    27,839,437
Stockholders' Equity        17,716,736     19,727,219    18,975,152    18,609,819    21,942,009
                           -----------    -----------   -----------   -----------   -----------
Total Liabilities and
 Stockholders' Equity      $52,214,563    $52,844,493   $50,730,738   $47,303,161   $49,781,446
                           ===========    ===========   ===========   ===========   ===========
</TABLE>

Item 7.   Management's Discussion and Analysis of Financial Condition and
          Results of Operation

The following discussion presents the financial condition and results of
operation for AMIG Ltd. combined with the financial condition and results of
operation for its predecessor entity, AIIG, for the periods and as of the dates
indicated.

Results of Operation

     A net loss of $(741,560) was reported in 2002, compared to net income of
$751,092 in 2001. A net loss of $648,013 was reported in 2000.

     Premiums earned increased by 5.9% in 2002 to $6,775,407 from $6,400,322 in
2001. Premiums earned for 2001 decreased by 2.2% from $6,544,342 reported in
2000. In 2002, 2001, and 2000 premiums earned includes $59,577, $0 and $0,
respectively, resulting from reductions in the ultimate estimated premium ceded
pursuant to retrocession agreements in effect during 1989 through mid-1993.
Ultimate premiums are dependent on loss experience under the agreements and are
reevaluated as ultimate losses are reevaluated.

     The increase in earned premiums during 2002 is attributable to the
fluctuation of the effective dates of policies written in the comparative
period. Premiums written increased by 3.9% in 2002 to $6,998,378 from $6,738,231
in 2001. The increase in premiums written during 2002 is attributable to the
continued growth of the AICPA Plan, primarily the result of rate increases
associated with a "step plan" which was initiated during 1995. Under the step
plan, insureds are offered discounted premium rates for favorable loss
experience. However, as these insureds experience losses their premiums are
"stepped up" accordingly. Because of the use of claims-made policies, as the
number of years of coverage provided increases, CNA's (and AMIG Ltd.'s) exposure
increases. This additional exposure results in an increase in premiums charged.

     Net investment income, includes amounts earned on the Company's investment
portfolio and cash equivalents. Net investment income decreased $233,764 or
11.0% in 2002 to $1,887,778 from $2,121,542 in 2001. Net investment income in
2001 decreased by $22,837, or 1.1% from the $2,144,379 reported in 2000.

     Net realized capital gains and losses decreased $1,991,607 in 2002 to
$(1,005,185) from $986,422 in 2001. 2002 includes realized capital gains on
sales of $513,702 less realized loss on other than temporary impairment of
investments of $(1,518,887). Net realized capital gains and losses in 2001
increased by $1,155,241 from the $(168,819) reported in 2000.

     Invested assets including cash equivalents increased by $485,637 or 1.0% to
$49,426,851 in 2002 compared to $48,941,214 in 2001. 2001 invested assets
increased by 2.2% from $47,888,738 in 2000. Investment yield including net
realized capital

                                        8

<PAGE>

gains and losses in 2002 was 1.8% as compared to 6.4% in 2001 and 4.3% in 2000.
Excluding realized capital gains and losses, the yield was 3.8% in 2002, 4.4% in
2001 and 4.6% in 2000. The decrease in investment yield excluding realized
capital gains and losses from 2001 to 2002 is primarily due to a decrease in the
fixed term investments market yield.

     Unrealized gain on investments is $3,330,260 at December 31, 2002 as
compared to $3,582,854 at December 31, 2001. AMIG Ltd. considers all of its
investment portfolio to be available for sale and accordingly all investments
are reported at market value, with changes in net unrealized gains and losses
reflected as an adjustment to accumulated other comprehensive income.

     The composition of the investment portfolio at December 31, 2002 and 2001
is as follows:

                                                      2002   2001
                                                      ----   ----
  U.S. Treasury notes                                   0%     0%
  Mortgage backed securities and obligations of
   U.S. Government agencies                            44     39
  Corporate debt securities                             7      4
  Obligations of state and political subdivisions      18     21
  Equity securities                                    31     36
                                                     ----   ----
                                                      100%   100%
                                                     ====   ====

     AMIG Ltd. continues to invest in high-grade debt and equity securities.

     Losses and loss adjustment expenses incurred decreased by 9.8% to
$5,468,410 in 2002 from $6,065,656 in 2001, and for 2001 decreased by 2.7% from
$6,231,210 in 2000. These amounts include favorable development of prior years'
estimates of losses and loss adjustment expense of approximately $577,001 in
2002, $22,742 in 2001 and $0 in 2000. AMIG Ltd.'s loss ratio, calculated as the
ratio of losses and loss adjustment expense to premiums earned, is 80.7% in
2002, 94.8% in 2001 and 95.2% in 2000. The ratio calculated using only losses
and loss adjustment expenses incurred for the current year (excluding the
effects of developments of prior year estimates and excluding reductions to
retrocession premiums) is 89.2% in 2002, 95.1% in 2001, 95.2% in 2000.

     The Company's actuary provides a range for loss reserves at December 31
each year. At December 31, 2002 the Company's management determined that the net
reserve should be $29,804,620. This amount is within, and at the upper end of
the range provided by the actuary of $20,503,000 at the current mid reserve
estimate and $31,204,000 at the high end. Due to the inherent uncertainty in
reserving for accountants' professional liability claims, management believes
this is an appropriate reserving policy. It should be noted that any reserve
amount selected in the range has a direct effect on the net income of any given
year, as well as shareholders' equity and the book value per share of the
Company.

     Policy acquisition costs of $1,983,400 were expensed in 2002 as compared to
$1,891,474 in 2001, an increase of 4.9%. Policy acquisition costs expensed in
2001 reflect a decrease of 1.9% from $1,927,973 in 2000. Such costs as a
percentage of premiums earned (excluding the effects of increases to
retrocession premiums) are 29.5% in 2002, 29.6% in 2001 and 29.5% in 2000, and
result primarily from ceding commissions paid to ceding companies determined
contractually pursuant to reinsurance agreements and federal excise taxes paid
on premiums written to ceding companies.

     Operating and management expenses increased by 18.5% in 2002 to $947,750
from $800,064 in 2001. The primary reasons for this increase are due to
increased legal fees for additional SEC disclosures. Operating and management
expenses for 2001 decreased by 21.0% from $1,013,138 in 2000, due to a
significant reduction in 2001 legal fees due to completion of work on the
redomestication to Bermuda compared to 2000. As well, due to the events of
September 11th, 2001, there was one less meeting of the AMIG Ltd. Board of
Directors resulting in a reduction in Director's fees and travel expenses.

     Effective December 2, 1999, the date of redomestication to Bermuda, the
Company ceased to pay corporate income taxes, which meant the Company's deferred
tax asset

                                       9

<PAGE>

could not be utilized. As the Company reported a tax loss for the period ended
December 2, 1999, a tax benefit resulted. This amount was received in 2002.

Liquidity and Capital Resources

     The Company's cash needs consist of settlement of losses and expenses under
its reinsurance treaty and funding day-to-day operations. Management expects to
be able to meet these needs from cash flows arising from its investment
portfolio. Because substantially all of the Company's assets are marketable
securities, the Company has sufficient flexibility to provide for unbudgeted
cash needs which may arise without resorting to borrowing.

     As of December 31, 2002, total invested assets amounted to $46,267,306, an
increase of $181,873 or 0.4% from $46,085,433 at December 31, 2001. Cash
balances increased from $2,855,781 at December 31, 2001 to $3,159,545 at
December 31, 2002. The amount of cash and cash equivalents varies depending on
the maturities of fixed term investments and on the level of funds invested in
money market mutual funds. The ratio of cash and invested assets to total
liabilities and stockholders' equity at December 31, 2002 was .95 to 1, compared
to .93 to 1 at December 31, 2001.

     AMIG Ltd.'s gross premiums assumed in 2002 amounted to $6,998,378, an
increase of $260,147 from 2001. Gross premium assumed in 2001 increased by
$461,797, or 7.4% from 2000. Assumed reinsurance premiums receivable represents
current assumed premiums receivable less commissions payable to the fronting
carriers. This balance was $514,992 at December 31, 2002 and $1,145,874 at
December 31, 2001. This balance also fluctuates due to the timing of renewal
premiums written. The increase in premiums has also resulted in a direct
increase in policy acquisition costs, unearned premiums, fixed commissions paid
to CNA as part of its quota share agreement, and loss reserves.

     Reinsurance recoveries represent AMIG Ltd.'s estimate of losses to be
reimbursed by its reinsurer from future loss payments. AMIG Ltd. (through AMIC)
entered into excess of loss retrocession agreements to limit its retained risk
on any one claim underwritten by Coregis Group, Inc. (formerly Crum and Forster
Managers Corporation), to $50,000 in 1989 and 1990 and $62,500 in 1991 through
mid-1993, subject to specified maximum recoveries for each contract year.
Retrocession premiums ceded by AMIG Ltd. are adjustable within a specified range
based on actual experience under each contract. Amounts recoverable from the
reinsurers pursuant to retrocession agreements have been estimated using
actuarial assumptions consistent with those used in establishing the liability
for unpaid losses and loss adjustment expenses.

     Reinsurance balances payable represent AMIG Ltd.'s estimate of the premiums
due to the Company's reinsurer under the retrocession agreements described
above, and amounts currently due for losses and loss adjustment expenses
payable. The estimate of reinsurance balances due for retrospective premiums
decreased by $174,833, $0 and $0 during 2002, 2001 and 2000, respectively.
Including loss and loss adjustment expenses currently due, reinsurance balances
payable are $0 at December 31, 2002 and $174,833 at December 31, 2001.

     Prepaid expenses and other assets amounted to $136,204 at December 31,
2002, an increase of 4.4% from 2001.

     Deferred policy acquisition costs, representing the deferral of ceding
commission expense related to premiums not yet earned, increased from December
31, 2001 along with the increase in unearned premiums. The current ceding
commission rate, which became effective August 1, 1995, is 28.5%.

     The Company paid its thirtieth consecutive quarterly dividend of $0.65 per
share during the fourth quarter of 2002.

     During 2002, 2001 and 2000, the Board of Directors declared quarterly
dividends of $0.65 per share totaling $803,430, $821,556 and $855,681,
respectively. Continuation of quarterly dividend payments is subject to the
Board of Directors' continuing evaluation of the Company's level of surplus vis
a vis its capacity to accept more business. It is an objective of the Company to
build surplus to retain flexibility for any future business expansion.

Property/Casualty Losses and Loss Adjustment Expenses

                                       10

<PAGE>

     The consolidated financial statements include the established liability for
unpaid losses and loss adjustment expenses ("LAE") of the Company's
property/casualty ("P/C") insurance operations. The liabilities for losses and
loss adjustment expenses are determined utilizing both case-basis evaluations
and actuarial projections, which together represent an estimate of the ultimate
net cost of all unpaid losses and LAE incurred through December 31 of each year.
These estimates are subject to the effect of trends in future claim severity and
frequency. The estimates are continually reviewed and, as experience develops
and new information becomes known, the liability is adjusted as appropriate, and
reflected in current financial reports.

     The anticipated effect of inflation is implicitly considered when
estimating liabilities for losses and LAE. Future average severity is projected
based on historical trends adjusted for anticipated changes in underwriting
standards, policy provisions and general economic trends. These anticipated
trends are monitored based on actual development and are modified as necessary.

     As is customary in the business, an actuarial review and projection is
performed for AMIC Ltd by its independent actuary as of June 30 and December 31
of each year. The Company reviews the actuarial estimates throughout the year
and the possible impact on the Company's financial position. Unless a
significant trend is evident during the year, the Company's policy has been to
make adjustments in the fourth quarter.

     In preparing ultimate loss and allocated loss adjustment expenses, the
Company's actuary examined a variety of methods. The method most commonly relied
up on was the Generalized Cape Cod Method, which was applied to the incurred,
adjusted incurred and paid losses. The case reserving practices for the CNA
business differ significantly from those of the Coregis business, therefore, the
actuary performed a claims-adjusted incurred loss development method on the CNA
data, which adjusted the reserves upward to reflect what would have been
outstanding reserves at the level of the Coregis reserves. The actuary selected
the Generalized Cape Cod Method applied to claims-adjusted incurred losses to
determine ultimate loss estimates for CNA. The actuary also applied the standard
paid and incurred loss development methods to the CNA data, however, these were
not selected because of the belief that they are biased downward due to the CNA
case reserving and claim closing practices.

     The result of this process is that twice a year, the actuary has made
recommendations of a range of ultimate loss estimate to AMIC's Board of
Directors, which for each period has selected ultimate loss estimates that fall
within that range. Based on the foregoing practice, the estimated loss ratio has
been updated by AMIG Ltd.'s Board of Directors at least once each year.

     The following table shows the development of the estimated liability for
the previous ten years of the Company's P/C operations:

ANALYSIS OF LOSS AND LOSS ADJUSTMENT EXPENSES DEVELOPMENT
(Thousands of Dollars)

Amounts prior to 1993 restated to conform with SFAS 113

<TABLE>
<CAPTION>
                                                                Year Ended December 31,
                                         1992    1993    1994    1995    1996    1997    1998    1999    2000    2001    2002
                                         ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----
<S>                                      <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Gross Liability for Loss and LAE
  Reserves ..........................  $25,287 $27,047 $25,335 $21,789 $20,300 $20,803 $21,718 $25,037 $27,703 $29,243 $30,479
Reinsurance Recoverable for Unpaid
  Loss and LAE Reserves .............      969   4,764   4,071   3,160   2,020   1,040     876     674     674     674     674
                                       ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
Net Liability for Unpaid Losses and
  LAE reserves ......................  $24,318 $22,283 $21,264 $18,629 $18,280 $19,763 $20,842 $24,363 $27,029 $28,569 $29,805
</TABLE>

                                       11

<PAGE>

<TABLE>
<CAPTION>
                                                           Year Ended December 31,
                                    1992    1993    1994    1995    1996    1997    1998    1999    2000    2001    2002
                                    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----    ----
<S>                                 <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>     <C>
Losses Reestimated as of:
     One Year Later .............. 23,004  18,099  17,957  15,709  16,869  14,883  18,309  21,062  25,775   27,992     -
     Two Years Later ............. 20,133  15,064  15,042  14,299  10,161  12,919  15,750  17,451  28,307
     Three Years Later ........... 17,782  12,196  13,635   8,417   9,458  11,531  12,359  20,055
     Four Years Later ............ 15,520  10,811   9,322   7,849   8,864  10,596  14,136
     Five Years Later ............ 14,825   8,479   9,074   7,621   8,419  11,780
     Six Years Later ............. 12,817   8,328   8,987   7,541   8,839
     Seven Years Later ........... 12,651   8,190   9,098   7,542
     Eight Years Later ........... 12,557   8,628   8,858
     Nine Years Later ............ 12,858   8,667
     Ten Years Later ............. 13,087

Cumulative Redundancy(Deficiency)  11,231  13,616  12,406  11,087   9,441   7,983   6,706,  4,308, (1,278)     577     -

Cumulative Amount Paid Through:

     One Year Later ..............  6,100   1,555   4,007   2,885   3,036   3,567   3,030   3,301   4,358    4,094     -
     Two Years Later .............  7,860   5,128   6,469   4,791   5,580   5,531   5,589   6,759   7,233
     Three Years Later ........... 10,370   6,765   7,721   6,087   6,471   6,919   7,785   8,563
     Four Years Later ............ 11,436   7,666   8,551   6,655   7,065   8,032   8,581
     Five Years Later ............ 11,878   8,199   8,920   6,883   7,546   8,364
     Six Years Later ............. 12,263   8,398   9,007   7,268   7,729
     Seven Years Later ........... 12,412   8,536   9,277   7,324
     Eight Years Later ........... 12,506   8,609   9,327
     Nine Years Later ............ 12,575   8,662
     Ten Years Later ............. 12,598
</TABLE>

     The above table of losses reestimated has been prepared on a net basis -
i.e., loss and loss adjustment expenses and reinsurance recoveries receivable
have not been grossed-up, as required under FAS 113. The schedule has been
prepared on a net basis due to the relative immateriality of reinsurance
balances when considered in relation to total loss and loss adjustment expense
reserves, and due to the cost/benefit of not providing such information.

     The above table presents the development of balance sheet liabilities for
1992 through 2002 as of year-end 2002. The top line of the table shows the
original recorded unpaid liability for losses and LAE recorded at the balance
sheet date for each of the indicated years.

     This liability represents the estimated amount of losses and LAE for claims
arising in all prior years, both paid and unpaid at the balance sheet date,
including losses that had been incurred, but not yet reported, to the Company.
The upper portion of the table shows the experience as of the end of each
succeeding year. The estimate is increased or decreased as more information
becomes known about the frequency and severity of claims.

     The "cumulative redundancy (deficiency)" represents the aggregate change in
the estimates over all prior years. For example, the 1995 liability has
developed a $11,087,000 redundancy which has been reflected in income in
subsequent years as the reserves were reestimated.

     The lower section of the table shows the cumulative amount paid in respect
of the previously recorded liability as of the end of each succeeding year. For
example, the 1995 year end liability was originally $18,629,000. As of December
31, 2002, the Company had paid $7,324,000 of the currently estimated $7,542,000
of losses and LAE that had been incurred for 1995 and prior years through the
end of 2002; thus an estimated $218,000 in losses incurred through 1995 remain
unpaid as of the current financial statement date.

     In evaluating this information, it should be understood that each amount
includes the effects of all changes in amounts for prior periods. This table
does not present accident or policy year development data, which readers may be
more accustomed to analyzing. Conditions and trends that have affected
development of liability in the past may not necessarily occur in the future.
Accordingly, it may not be appropriate to extrapolate future redundancies or
deficiencies based on this table.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Inflation

     The Company does not believe its operations have been materially affected
by inflation. The potential adverse impacts of inflation include: (a) a decline
in the market value of the Company's fixed maturity investment portfolio; (b) an
increase

                                       12

<PAGE>

in the ultimate cost of settling claims which remain unresolved for a
significant period of time; and (c) an increase in the Company's operating
expenses. However, the Company generally holds its fixed maturity investments to
maturity and currently believes that the yield is adequate to compensate the
Company for the risk of inflation. In addition, any increase from inflation in
the ultimate cost of settling unpaid claims will be offset by investment income
earned during the period that the claim is outstanding. Finally, the increase in
operating expenses resulting from inflation should generally be matched by
similar inflationary increases in the premium rates.

Market Sensitive Instruments

     Market risk generally represents the risk of loss that may result from
potential change in the value of a financial instrument due to a variety of
market conditions. The Company's exposure to market risk is generally limited to
potential losses arising from changes in the level of interest rates on market
values of fixed term holdings and changes in the market values of equity
securities. The Company does not hold or issue derivative financial instruments
for either trading or hedging purposes.

     a)   Interest Rate Risk

     Interest rate risk results from the Company's holdings in interest-rate-
sensitive instruments. The Company is exposed to potential losses arising from
changes in the level of interest rates on fixed rate instruments held. The
Company is also exposed to credit spread risk resulting from possible changes in
the issuer's credit rating. To manage its exposure to interest rate risk the
Company attempts to select investments with characteristics that match the
characteristics of the related insurance liabilities. Additionally, the Company
generally only invests in higher-grade interest bearing instruments.

     b)   Foreign Exchange Risk

     The Company only invests in U.S. dollar denominated financial instruments
and does not have any exposure to foreign exchange risk.

     c)   Equity Price Risk

     Equity price risk arises from fluctuations in the value of securities held.
The Company invests in equity securities in order to diversify its investment
portfolio, which Management believes will assist the Company to achieve its goal
of long-term growth of capital and surplus. Management has adopted investment
guidelines that set out rate of return and asset allocation targets, as well as
degree of risk and equity investment restrictions to minimize exposure to
material risk from changes in equity prices.

FINANCIAL CONDITION AND LIQUIDITY

     On June 1, 2000, the Board of Directors of Investco, which holds almost all
of the Company's investment portfolio, authorized Investco to spend up to
$1,000,000 to purchase outstanding Common Shares of the Company. On September 8,
2000, the Bermuda Monetary Authority authorized the purchase of up to 15,000
Common Shares pursuant to the June 1 Board authorization. Such purchases are
affected through privately negotiated transactions and are in addition to
Investco's practice of purchasing the shares of individuals who have died or
retired from the practice of public accounting. Subsequently, on July 19, 2002,
the Bermuda Monetary Authority authorized blanket permission for Investco to
purchase Common Shares from individuals who have died or retired from the
practice of public accounting and on a negotiated case-by-case basis without
limit. To date, Investco has purchased 15,075 Common Shares for a purchase price
of $474,326. In addition, to date Investco has purchased 11,809 Common Shares
from individuals who have died or retired for a purchase price of $521,521.

     On December 2, 1999, the Company and its predecessor entity, AIIG,
consummated an exchange transaction pursuant to an Exchange Agreement, in which
AIIG transferred all of its assets and liabilities to the Company in exchange
for newly issued common shares of the Company. See Note 2 to the Consolidated
Financial Statements for a further description of the transaction.

                                       13

<PAGE>

Forward-Looking Statements

         Certain statements contained in this Form 10-K, or otherwise made by
officers of the Company, including statements related to the Company's future
performance and our outlook for our businesses and respective markets,
projections, statements of management's plans or objectives, forecasts of market
trends and other matters, are forward-looking statements, and contain
information relating to us that is based on the beliefs of management as well as
assumptions, made by, and information currently available to, management. The
words "goal", "anticipate", "expect", "believe" and similar expressions as they
relate to us or our management, are intended to identify forward-looking
statements. No assurance can be given that the results in any forward-looking
statement will be achieved. For the forward-looking statements, we claim the
protection of the safe harbor for forward-looking statements provided for in the
Private Securities Litigation Act of 1995. Such statements reflect the
management's current views with respect to future events and are subject to
certain risks, uncertainties and assumptions that could cause actual results to
differ materially from those reflected in the forward-looking statements.
Factors that might cause such actual results to differ materially from those
reflected in any forward-looking statements include, but are not limited to (i)
the occurrence of catastrophic events with a frequency or severity exceeding the
Company's expectations; (ii) a decrease in the level of demand for reinsurance
and or an increase in the supply of reinsurance capacity; (iii) increased
competitive pressures, including the consolidation and increased globalization
of reinsurance providers; (iv) actual losses and loss expenses exceeding the
Company's loss reserves, which is necessarily based on actuarial and statistical
projections of ultimate losses; (v) changing rates of inflation and other
economic conditions; (vi) losses due to foreign currency exchange rate
fluctuations; (vii) changes in the legal or regulatory environments in which the
Company operates; and (viii) other risks including those risks identified in any
of our other filings with the Securities and Exchange Commission. The foregoing
review of important factors should not be construed as exhaustive and should be
read in conjunction with other cautionary statements that are included herein.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which reflect management's analysis only as of the date they are
made. The Company undertakes no obligation to release publicly the results of
any future revisions it may make to forward-looking statements to reflect events
or circumstances after the date hereof or to reflect the occurrence of
unanticipated events.

                                       14

<PAGE>

Item 8.  Financial Statements and Supplementary Data

The financial statements required by this Item are listed below:

                   INDEX TO FINANCIAL STATEMENTS AND SCHEDULES


Financial Statements
----------------------------------------------------------------------  Page

Report of Independent Accountants ....................................    17
Consolidated Balance Sheets ..........................................    18
Consolidated Statements of Income and Other Comprehensive Income .....    19
Consolidated Statement of Changes in Stockholders' Equity ............ 20-22
Consolidated Statements of Cash Flows ................................    23
Notes to the Consolidated Financial Statements ....................... 24-34

Financial Statement Schedules:
----------------------------------------------------------------------

Reports of Independent Accountants on Financial Statement Schedule ...    35
Schedule I, Investments ..............................................    36
Schedule IV, Reinsurance .............................................    36

Schedules II, III, V, and VI are omitted as they are inapplicable, immaterial,
or because the required information may be found in the audited consolidated
financial statements and notes thereto.

                                       15

<PAGE>

Item 9.  Changes in and Disagreements with Accountants on Accounting and
         Financial Disclosure.

     There have been no changes in, or disagreements with, accountants on
accounting and financial disclosure. The retention of Deloitte & Touche by the
Company has been approved by the Company's Board of Directors. There have been
no disagreements with Deloitte & Touche with respect to any matter of accounting
principles or practices, financial statement disclosure or auditing scope or
procedure.

                                    PART III

Item 10. Directors and Executive Officers of the Registrant

     The information required by Item 10 of Form 10-K with respect to
identification of directors is incorporated by reference from the information
contained in the section captioned "Election of Directors" in the Company's
definitive Proxy Statement for the Annual Meeting of Shareholders to be held on
or after May 29, 2003 the ("Proxy Statement"), a copy of which will be filed
with the Securities and Exchange Commission before the meeting date.

Item 11. Executive Compensation

     The information required by Item 11 of Form 10-K is incorporated by
reference from the information contained in the section captioned "Executive
Compensation" in the Proxy Statement.

Item 12. Security Ownership of Certain Beneficial Owners and Management

     The information required by Item 12 of Form 10-K is incorporated by
reference from the information contained in the section captioned "Security
Ownership of Certain Beneficial Owners and Management" in the Proxy Statement.

Item 13. Certain Relationships and Related Transactions

     The information required by Item 13 of Form 10-K is incorporated by
reference from the information contained in the section captioned "Certain
Relationships and Related Transactions" in the Proxy Statement.

Item 14. Controls and Procedures

     Within the 90 days prior to the date of this report, the Company carried
out an evaluation, under the supervision and the participation of the Company's
management, including the Company's Chief Executive Officer and Chief Financial
Officer, of the effectiveness of the design and operation of the Company's
disclosure controls and procedures, as defined in Rules 13(a)-14(c) under the
Securities Exchange Act of 1934, as amended. Based upon that evaluation, the
Chief Executive Officer and Chief Financial Officer concluded that the Company's
disclosure controls and procedures are reasonably designed to be effective in
alerting them on a timely basis to material information relating to the Company
and it subsidiaries.

     There have been no significant changes in the Company's internal controls
or to the best of the Company's knowledge in other factors that could
significantly affect internal controls subsequent to the date the Company
carried out its evaluation.

                                     PART IV

Item 15. Exhibits, Financial Statement Schedules and Reports on Form 8-K

(a) (1)  See Index to Financial Statements on page 15.

(a) (2)  See Index to Financial Statement Schedules on page 15.

(a) (3)  See Index to Exhibits set forth on pages 40 - 41.

(b)      No reports on Form 8-K were filed during the year ended December 31,
         2002.

(c)      See Index to Exhibits set forth on pages 40 - 41.

(d)      See Index to Financial Statement Schedules on page 15.

                                       16

<PAGE>

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
of AmerInst Insurance Group, Ltd.

We have audited the accompanying consolidated balance sheets of AmerInst
Insurance Group, Ltd. and subsidiaries (the "Company") as at December 31, 2002
and 2001, and the related consolidated statements of operations and other
comprehensive income (loss), of changes in stockholders' equity, and of cash
flows for each of the three years in the period ended December 31, 2002. These
financial statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of AmerInst Insurance Group, Ltd. and
subsidiaries as at December 31, 2002 and 2001 and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 2002 in conformity with accounting principles generally accepted in
the United States of America.


/s/ Deloitte & Touche

DELOITTE & TOUCHE
Hamilton, Bermuda

March 21, 2003

                                       17

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

<TABLE>
<CAPTION>
                                                                          2002           2001
<S>                                                                   <C>            <C>
ASSETS
Investments (Notes 4 and 5):
  Fixed maturity investments, at market value
    (amortized cost $30,427,476 and $28,529,843)                      $ 31,905,804   $ 29,529,239
  Equity securities, at market value (cost $12,509,570
     and $13,972,736)                                                   14,361,502     16,556,194
                                                                      ------------   ------------
      TOTAL INVESTMENTS                                                 46,267,306     46,085,433

Cash and cash equivalents                                                3,159,545      2,855,781
Assumed reinsurance premiums receivable                                    514,992      1,145,874
Reinsurance balances recoverable (Note 6)                                  674,223        674,223
Fund deposit with a reinsurer (Note 4)                                     108,000        108,000
Accrued investment income                                                  399,435        448,786
Deferred policy acquisition costs                                          954,858        891,311
Federal income taxes receivable                                                  -        504,658
Prepaid expenses and other assets                                          136,204        130,427
                                                                      ------------   ------------
      TOTAL ASSETS                                                    $ 52,214,563   $ 52,844,493
                                                                      ============   ============
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses(Note 6)                    $ 30,478,843   $ 29,242,625
Unearned premiums                                                        3,350,380      3,127,409
Reinsurance balances payable                                                     -        174,833
Accrued expenses and other liabilities                                     668,604        572,407
                                                                      ------------   ------------
      TOTAL LIABILITIES                                                 34,497,827     33,117,274
                                                                      ============   ============
STOCKHOLDERS' EQUITY
Common stock, $1 par value, 500,000 shares authorized,
    2002 and 2001: 331,751 shares issued and outstanding                   331,751        331,751
Additional paid-in-capital                                               6,801,870      6,801,870
Retained earnings                                                        8,202,991      9,747,981
Accumulated other comprehensive income                                   3,330,260      3,582,854
Treasury stock (25,615 and 20,388 shares) at cost                         (950,136)      (737,237)
                                                                      ------------   ------------
      TOTAL STOCKHOLDERS' EQUITY                                        17,716,736     19,727,219
                                                                      ------------   ------------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                      $ 52,214,563   $ 52,844,493
                                                                      ============   ============
</TABLE>

         See accompanying notes to the consolidated financial statements

                                       18

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                    CONSOLIDATED STATEMENTS OF OPERATIONS AND
                        OTHER COMPREHENSIVE INCOME (LOSS)
                  years ended December 31, 2002, 2001, and 2000
                           (expressed in U.S. dollars)

<TABLE>
<CAPTION>
                                                              2002          2001          2000
<S>                                                       <C>           <C>           <C>
REVENUES
Net premiums earned (Note 7)                              $ 6,775,407   $ 6,400,322   $ 6,544,342
Net investment income (Note 5)                              1,887,778     2,121,542     2,144,379
Net realized capital gain (loss) (Note 5)                  (1,005,185)      986,422      (168,819)
                                                          -----------   -----------   -----------
      TOTAL REVENUES                                        7,658,000     9,508,286     8,519,902
                                                          -----------   -----------   -----------
LOSSES AND EXPENSES
Losses and loss adjustment expenses                         5,468,410     6,065,656     6,231,210
Policy acquisition costs                                    1,983,400     1,891,474     1,927,973
Operating and management expenses (Note 8)                    947,750       800,064     1,013,138
                                                          -----------   -----------   -----------
      TOTAL LOSSES AND EXPENSES                             8,399,560     8,757,194     9,172,321
                                                          -----------   -----------   -----------
      NET INCOME (LOSS) BEFORE INCOME TAXES                  (741,560)      751,092      (652,419)

Provision for income taxes (Note 9)                                 -             -         4,406
                                                          -----------   -----------   -----------
      NET INCOME (LOSS)                                      (741,560)      751,092      (648,013)
                                                          ===========   ===========   ===========
OTHER COMPREHENSIVE INCOME (LOSS),
Net unrealized holding gain (loss) arising
 during the period                                            261,108     2,194,042     2,052,356
Reclassification adjustment for (gain) and
  losses included in net income (loss)                       (513,702)     (986,422)      168,819
                                                          -----------   -----------   -----------
OTHER COMPREHENSIVE
INCOME(LOSS)                                                 (252,594)    1,207,620     2,221,175
                                                          -----------   -----------   -----------
COMPREHENSIVE INCOME (LOSS)                               $  (994,154)  $ 1,958,712   $ 1,573,162
                                                          ===========   ===========   ===========
BASIC EARNINGS (LOSS) PER SHARE                           $     (2.40)  $      2.37   $     (1.98)
                                                          ===========   ===========   ===========

Average common shares outstanding for the year                308,750       316,661       326,855
                                                          ===========   ===========   ===========
</TABLE>

         See accompanying notes to the consolidated financial statements

                                       19

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  years ended December 31, 2002, 2001 and 2000
                           (expressed in U.S. dollars)

<TABLE>
<CAPTION>
                                                                                          Accumulated
                                                                                            Other
                                                             Additional                  Comprehensive                   Total
                                                Common        Paid-in       Retained        Income,      Treasury     Stockholders'
                                                 Stock        Capital       Earnings      Net of Tax      Stock          Equity
                                              ------------  ------------  ------------   ------------  ------------   ------------
<S>                                           <C>           <C>           <C>            <C>           <C>            <C>
BALANCE AT DECEMBER 31, 1999                  $    331,751  $  6,801,870  $ 11,322,139   $    154,059  $          -   $ 18,609,819

Net income                                               -             -      (648,013)             -             -       (648,013)
Other comprehensive income, net of tax:
  Unrealized gains on securities,
    net of reclassification adjustment                   -             -             -      2,221,175             -      2,221,175
Purchases of treasury stock                              -             -             -              -      (352,148)      (352,148)
Cash dividends paid ($2.60 per share)                    -             -      (855,681)             -             -       (855,681)
                                              ------------  ------------  ------------   ------------  ------------   ------------
BALANCE AT DECEMBER 31, 2000                  $    331,751  $  6,801,870  $  9,818,445   $  2,375,234  $   (352,148)  $ 18,975,152
                                              ------------  ------------  ------------   ------------  ------------   ------------
</TABLE>

         See accompanying notes to the consolidated financial statements

                                       20

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  years ended December 31, 2002, 2001 and 2000
                           (expressed in U.S. dollars)

<TABLE>
<CAPTION>
                                                                                          Accumulated
                                                                                            Other
                                                             Additional                  Comprehensive                   Total
                                                Common        Paid-in       Retained        Income,      Treasury     Stockholders'
                                                 Stock        Capital       Earnings      Net of Tax      Stock          Equity
                                              ------------  ------------  ------------   ------------  ------------   ------------
<S>                                           <C>           <C>           <C>            <C>           <C>            <C>
BALANCE AT DECEMBER 31, 2000                  $    331,751  $  6,801,870  $  9,818,445   $  2,375,234  $   (352,148)  $ 18,975,152

Net income                                               -             -       751,092              -             -        751,092
Other comprehensive income net of tax:
  Unrealized gains on securities,
    net of reclassification adjustment                   -             -             -      1,207,620             -      1,207,620
Purchases of treasury stock                              -             -             -              -      (385,089)      (385,089)
Cash dividends paid ($2.60 per share)                    -             -      (821,556)             -             -       (821,556)
                                              ------------  ------------  ------------   ------------  ------------   ------------
BALANCE  AT DECEMBER 31, 2001                 $    331,751  $  6,801,870  $  9,747,981   $  3,582,854  $   (737,237)  $ 19,727,219
                                              ============  ============  ============   ============  ============   ============
</TABLE>

         See accompanying notes to the consolidated financial statements

                                       21

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
           CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
                  years ended December 31, 2002, 2001 and 2000
                           (expressed in U.S. dollars)

<TABLE>
<CAPTION>
                                                                                          Accumulated
                                                                                            Other
                                                             Additional                  Comprehensive                   Total
                                                Common        Paid-in       Retained        Income,      Treasury     Stockholders'
                                                 Stock        Capital       Earnings      Net of Tax      Stock          Equity
                                              ------------  ------------  ------------   ------------  ------------   ------------
<S>                                           <C>           <C>           <C>            <C>           <C>            <C>
BALANCE AT DECEMBER 31, 2001                  $    331,751  $  6,801,870  $  9,747,981   $  3,582,854  $   (737,237)  $ 19,727,219

Net income                                               -             -      (741,560)             -             -       (741,560)
Other comprehensive income net of tax:
  Unrealized loss on securities,
    net of reclassification adjustment                   -             -             -       (252,594)            -       (252,594)
Purchase of treasury stock                               -             -             -              -      (212,899)      (212,899)
Cash dividends paid ($2.60 per share)                    -             -      (803,430)             -             -       (803,430)
                                              ------------  ------------  ------------   ------------  ------------   ------------
BALANCE AT DECEMBER 31, 2002                  $    331,751  $  6,801,870  $  8,202,991   $  3,330,260  $   (950,136)  $ 17,716,736
                                              ============  ============  ============   ============  ============   ============
</TABLE>

         See accompanying notes to the consolidated financial statements

                                       22

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                  years ended December 31, 2002, 2001 and 2000
                           (expressed in U.S. dollars)

<TABLE>
<CAPTION>
                                                                       2002           2001           2000
<S>                                                               <C>            <C>            <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss)                                                 $   (741,560)  $    751,092   $   (648,013)
Adjustments to reconcile net income (loss) to net cash
  provided by operating activities:
     Amortization of net premiums on investments                        32,793        69,135        111,278
     Net realized (gains) losses on sale of investments               (513,702)      (986,422)       168,819
     Realized loss on other than temporary impairment                1,518,887              -              -
Changes in assets and liabilities:
     Assumed reinsurance premiums receivable                           630,882     (1,030,618)      (115,256)
     Accrued investment income                                          49,351         11,499         27,557
     Deferred policy acquisition costs                                 (63,547)       (96,304)        76,355
     Federal income taxes receivable                                   504,658         24,771        142,906
     Prepaid expenses and other assets                                  (5,777)        29,373        (79,213)
     Unpaid losses and loss adjustment expenses                      1,236,218      1,539,540      2,666,056
     Unearned premiums                                                 222,971        337,910       (267,909)
     Reinsurance balances payable                                     (174,833)      (131,696)       210,421
     Accrued expenses and other liabilities                             96,197         28,614         40,996
     Due to broker                                                           -       (412,680)       412,680
                                                                  ------------   ------------   ------------
        Net cash provided by operating activities                    2,792,538        134,214      2,746,677
                                                                  ------------   ------------   ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of investments                                           (30,418,732)   (17,713,781)   (49,575,685)
Proceeds from sales and maturities of investments                   28,946,287     19,580,660     44,970,615
                                                                  ------------   ------------   ------------
        Net cash provided by (used in) investing activities         (1,472,445)     1,866,879     (4,605,070)
                                                                  ------------   ------------   ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends paid                                                        (803,430)      (821,556)      (855,681)
Purchases of treasury stock                                           (212,899)      (385,089)      (352,148)
                                                                  ------------   ------------   ------------
        Net cash used in financial activities                       (1,016,329)    (1,206,645)    (1,207,829)
                                                                  ------------   ------------   ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS                                303,764        794,448     (3,066,222)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                         2,855,781      2,061,333      5,127,555
                                                                  ------------   ------------   ------------
CASH AND CASH EQUIVALENTS, END OF YEAR                            $  3,159,545   $  2,855,781   $  2,061,333
                                                                  ============   ============   ============
SUPPLEMENTAL DATA - Income taxes (received) paid                  $   (504,658)  $     24,771   $   (147,312)
                                                                  ============   ============   ============
</TABLE>

         See accompanying notes to the consolidated financial statements

                                       23

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

1.   DESCRIPTION OF BUSINESS

     AmerInst Insurance Group, Ltd., ("AMIG Ltd." or the "Company") was formed
     under the laws of Bermuda on July 16, 1998. The Company, through its
     wholly-owned subsidiary AmerInst Insurance Company Ltd. (AMIC Ltd.) and its
     predecessor, has been engaged in the reinsurance of claims-made insurance
     policies of participants in an AICPA - endorsed insurance program that
     provides accountants' professional liability insurance coverage (AICPA
     Plan). In 1999, as part of the redomestication and restructuring (see Note
     2), AMIC Ltd. assumed the rights and obligations of AIIC Inc. under the
     reinsurance agreements.

     The reinsurance activity of AMIC Ltd. depends upon agreements entered into
     with outside parties. From the inception of AmerInst Insurance Group Inc.
     ("AIIG"), AMIG Ltd.'s predecessor entity, through mid-1993, Crum and
     Forster Managers Corporation, through a group of affiliated insurance
     companies (collectively, "CGI"), was the primary insurer for the AICPA
     Plan. In 1988, AIIG's wholly-owned subsidiary, AIIC Inc. provided
     reinsurance to CGI, assuming 10% of the risks related to the first
     $1,000,000 of coverage for each policy issued under the program. For the
     period 1989 through mid-1993, an unaffiliated company, Virginia Surety
     Company, Inc., ("VSC") provided reinsurance to CGI and retroceded a portion
     to AIIC Inc. such that AIIC Inc. assumed 10% to 12.5% of the risk related
     to the first $1,000,000 of coverage limits for each policy issued under the
     program. In August 1993, the AICPA Plan endorsed the CNA insurance group as
     its insurance carrier, replacing CGI as the primary insurer. AIIC Inc. then
     began a reinsurance relationship with CNA, taking a 10% participation of
     the first $1,000,000 of liability of each policy written under the plan.
     Effective in December 1999, the Company began taking a 10% share of the
     "value plan" business from CNA, the "value plan" provides for separate
     $1,000,000 limits for losses and separate $1,000,000 limits for expenses.
     Additionally there is a separate $2,000,000 policy aggregate for combined
     losses and expenses.

     AIIC entered into excess of loss retrocession agreements to limit its
     retained risk on any one claim underwritten by CGI to $50,000 in 1989 and
     1990 and $62,500 in 1991 through mid-1993, subject to specified maximum
     recoveries for each contract year. Retrocession premiums ceded by the
     Company are adjustable within a specified range based on actual experience
     under each contract. Retrocession transactions do not relieve AMIC Ltd.
     from its obligation to the ceding companies.

2.   REDOMESTICATION AND RESTRUCTURING

     At December 2, 1999 AmerInst Insurance Group Inc. (AIIG) a Delaware company
     and AMIG Ltd. entered into an Exchange Agreement ("Exchange"), pursuant to
     which AIIG transferred all of its assets and liabilities to AMIG Ltd. in
     exchange for newly issued shares of AMIG Ltd. AIIG was then liquidated and
     AIIG shareholders received on a share-for-share basis the newly issued
     shares of AMIG Ltd.

     The restructuring of AIIG's business, including the redomestication of the
     insurance operations of AIIC to AMIG Ltd. was consummated in the following
     steps:

     AmerInst Insurance Company Inc. ("AIIC"), an Illinois company and a
     wholly-owned subsidiary of AIIG, distributed to AIIG a cash dividend, of
     approximately $20,000, to be used solely to fund the capitalization
     required for the formation of the new entities described below; and the
     expenses of the restructuring.

     AIIC formed a new wholly-owned subsidiary, AmerInst Mezco, Ltd., under the
     laws of Bermuda ("Mezco"). Mezco was funded by AIIC with investment
     securities in an amount sufficient for the capitalization of a Bermuda
     insurance company.

                                       24

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

2.   REDOMESTICATION AND RESTRUCTURING (cont'd)

     AIIC distributed all of the shares of Mezco to AIIG as a dividend.

     Mezco formed a new wholly-owned subsidiary, AMIC Ltd., under the laws of
     Bermuda.

     AIIC retroceded to AMIC Ltd. all of its insurance treaty liabilities under
     past treaties, and paid to AMIC Ltd. in connection therewith a premium
     determined on the basis of actuarial projections, appropriately discounted
     based on the expected payout patterns, intended to reflect an arms' length
     fair market value for such retrocession. The payment of the premium was
     partially in the form of a transfer of investment securities at market
     value.

     AMIC Ltd. formed a new wholly-owned subsidiary, AmerInst Investment
     Company, Ltd. ("Investco") under the laws of Bermuda and contributed assets
     to capitalize Investco, and provided a subsequent transfer of securities.

     AIIC was liquidated, with its remaining assets and liabilities distributed
     to AIIG.

     Pursuant to the Exchange, AIIG exchanged all of its assets (including the
     shares of Mezco) and liabilities with AMIG Ltd. solely for AMIG Ltd. common
     shares, and the currently outstanding AMIG Ltd. common shares were
     cancelled.

     AIIG was dissolved, with holders of shares of AIIG common stock receiving
     the AMIG Ltd. common shares previously issued to AIIG by AMIG Ltd. on a
     share-for-share basis.

     A replacement treaty for the CNA Treaty was entered into between AMIC Ltd.
     and CNA.

     Following the restructuring, Mezco, AMIC Ltd. and Investco, became
     wholly-owned direct and indirect subsidiaries of the AMIG Ltd. and neither
     AIIG nor AIIC continued to exist as separate entities.

     The transfers of the operations of AIIG to AMIG Ltd. has been accounted for
     at historic cost in a manner similar to that in pooling-of-interests
     accounting.

3.   ACCOUNTING POLICIES

     Basis of presentation

     The accompanying consolidated financial statements have been prepared in
     conformity with accounting principles generally accepted in the United
     States of America and include the accounts of AMIG Ltd. and its
     wholly-owned subsidiaries, Mezco, AMIC Ltd. and Investco. Intercompany
     accounts and transactions have been eliminated in consolidation.

                                       25

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

3.   ACCOUNTING POLICIES (cont'd)

     The preparation of financial statements in conformity with generally
     accepted accounting principles requires management to make estimates and
     assumptions that affect the reported amounts of assets and liabilities and
     disclosure of contingent assets and liabilities at the date of the
     financial statements and the reported amounts of revenues and expenses
     during the reporting period. Actual results could differ from those
     estimates. The most significant estimates include those used in determining
     reserves, deferred policy acquisition costs and valuation of investments.

     Premiums

     Premiums assumed are earned on a pro rata basis over the terms of the
     underlying policies to which they relate. Premiums assumed relating to the
     unexpired portion of policies in force at the balance sheet date are
     recorded as unearned premiums. Pursuant to prior retrocession agreements,
     charges or credits resulting from adjustments to related provisional
     retrocession premiums are reflected as adjustments to ceded premiums.
     Management believes that recorded retrocession premiums ceded represent its
     best estimate of such amounts; however, as changes in the estimated
     ultimate losses and loss adjustment expenses applicable to the retrocession
     layers are determined, the estimated ultimate ceded premiums will also
     change. As adjustments to these estimates become necessary, such
     adjustments are reflected in current operations.

     Deferred policy acquisition costs

     Ceding commissions related to assumed reinsurance agreements are deferred
     and amortized over the terms of the underlying policies to which they
     relate.

     Unpaid losses and loss adjustment expenses

     The liability for unpaid losses and loss adjustment expenses includes case
     basis estimates of reported losses plus supplemental amounts for projected
     losses incurred but not reported (IBNR), calculated based upon loss
     projections utilizing certain actuarial assumptions and AMIC Ltd.'s
     historical loss experience supplemented with industry data. Management
     believes that its aggregate liability for unpaid losses and loss adjustment
     expenses at year end represents its best estimate, based upon the available
     data, of the amount necessary to cover the ultimate cost of loss, based
     upon an actuarial analysis prepared by a consulting actuary. However,
     because of the volatility inherent in professional liability coverage,
     actual loss experience may not conform to the assumptions used in
     determining the estimated amounts for such liability at the balance sheet
     date. Accordingly, the ultimate liability could be significantly in excess
     of or less than the amount indicated in the financial statements. As
     adjustments to these estimates become necessary, such adjustments are
     reflected in current operations. AMIC Ltd. does not discount its loss
     reserves for purposes of these financial statements.

     The anticipated effect of inflation is implicitly considered when
     estimating liabilities for unpaid losses and loss adjustment expenses.
     Future average severities are projected based on historical trends adjusted
     for anticipated trends, are monitored based on actual development and are
     modified if necessary.

                                       26

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

3.   ACCOUNTING POLICIES (cont'd)

     Reinsurance recoveries receivable

     Reinsurance recoveries receivable is comprised of estimated amounts of
     losses and loss adjustment expenses paid and unpaid which are expected to
     be recoverable from reinsurers. Amounts recoverable from the reinsurers
     pursuant to retrocession agreements have been estimated using actuarial
     assumptions consistent with those used in establishing the liability for
     unpaid losses and loss adjustment expenses. Management believes that
     reinsurance recoveries receivable as recorded represents its best estimate
     of such amounts; however, as changes in the estimated ultimate liability
     for unpaid losses and loss adjustment expenses are determined, the
     estimated ultimate amount recoverable from the reinsurers will also change.
     Accordingly, the ultimate recoverable could be significantly in excess of
     or less than the amount indicated in the financial statements. Further,
     management has determined that no provision for uncollectible reinsurance
     recoveries is necessary. As adjustments to these estimates become
     necessary, such adjustments are reflected in current operations.

     Investments

     Investments held by AMIG Ltd. consist of obligations of states and
     political subdivisions and debt securities, mortgage-backed securities, and
     equity securities. AMIG Ltd. classifies these investments as
     available-for-sale. Accordingly, AMIG Ltd. reports these securities at
     their estimated fair values with unrealized holding gains and losses being
     reported as other comprehensive income, net of applicable taxes. Fair value
     of investments is based on market quotation. Realized capital gains and
     losses on sales of investments are accounted for by specifically
     identifying the cost and are reflected in the income statement in the
     period of sale.

     Declines in the market value of investments below cost are evaluated for
     other than temporary impairment losses. The evaluation for other than
     temporary impairment losses is a quantitative and qualitative process which
     is subject to risks and uncertainties in the determination of whether
     declines in the fair value of investments are other than temporary. The
     risks and uncertainties include changes in general economic conditions, the
     issuer's financial condition or near term recovery prospects, and the
     effects of changes in interest rates. AMIG Ltd.'s accounting policy
     requires that a decline in the value of a security below its cost basis be
     assessed to determine if the decline is other than temporary. If so, the
     security is deemed to be impaired and, a charge is recorded in net realized
     capital losses equal to the difference between the fair value and the cost
     basis of the security. The fair value of the impaired investment becomes
     its new cost basis.

     Cash and cash equivalents

     For purposes of the statements of cash flows, AMIG Ltd. considers all money
     market funds and highly liquid debt instruments purchased with an original
     maturity of three months or less to be cash equivalents.

     Fair Value of Financial Instruments.

     Fair Value for fixed maturities, short-term investments and equities are
     based on quoted market prices. Carrying value of other invested assets
     approximates fair value.

     Net income per common share

     Basic earnings per share is determined as net income available to common
     shareholders divided by the weighted average number of common shares
     outstanding for the period. There are no dilutive securities.

                                       27

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

3.   ACCOUNTING POLICIES (cont'd)

     Accounting pronouncements

     In June 1998, the Financial Accounting Standards Board issued Statement of
     Financial Accounting Standards No. 133, "Accounting for Derivative
     Instruments and Hedging Activities" (SFAS 133). SFAS 133 establishes
     accounting and reporting standards for derivative instruments, including
     certain derivative instruments embedded in other contracts, and hedging
     activities. It requires that an entity recognize all derivatives as either
     assets or liabilities in the statement of financial position and measure
     those instruments at fair value. SFAS 133 became effective in the first
     quarter of fiscal 2001 and does not have a material impact on the Company's
     financial position or results of operations as of December 31, 2002.

4.   PLEDGED ASSETS

     Pursuant to the reinsurance agreements described in Note 1, AMIC Ltd. is
     required to provide the ceding companies with collateral for AMIC Ltd.'s
     liabilities to them. At December 31, 2002 and 2001, $108,000 was held in
     deposit pursuant to the 1988 reinsurance agreement with CGI. Also at
     December 31, 2002 and 2001, the carrying value of investments in a trust
     account held by Bank of New York pursuant to reinsurance agreements with
     VSC in effect from 1989 to mid-1993 was $358,538 and $3,055,536,
     respectively. Additionally, at December 31, 2002 and 2001, AMIC Ltd. had
     provided CNA with a Section 114 Trust, held by Jpmorgan Chase Bank, with
     investments with a carrying value of $17,919,996 and $16,742,314
     respectively.

5.   INVESTMENTS

     The cost or amortized cost, gross unrealized holding gains and losses, and
     estimated fair value of investments in fixed maturity investments by major
     security type, and equity securities at December 31, 2002 and 2001 are as
     follows:

<TABLE>
<CAPTION>
                                           Cost or        Gross         Gross       Estimated
                                          Amortized    Unrealized    Unrealized       Fair
                                            Cost          Gains         Losses        Value
                                         -----------   -----------   -----------   -----------
     <S>                                 <C>           <C>           <C>           <C>
     December 31, 2002

     Fixed maturity investments:
     Obligations of states and
     political subdivisions              $ 7,954,915   $   502,108   $   (13,677)  $ 8,443,346
     Corporate debt securities             3,190,040        13,993       (68,995)    3,135,038
     Mortgage-backed securities           19,282,521     1,054,372        (9,473)   20,327,420
                                         -----------   -----------   -----------   -----------
     Total fixed maturity investments     30,427,476     1,570,473       (92,145)   31,905,804
     Equity securities                    12,509,570     2,209,636      (357,704)   14,361,502
                                         -----------   -----------   -----------   -----------
     Total investments                   $42,937,046   $ 3,780,109   $  (449,849)  $46,267,306
                                         ===========   ===========   ===========   ===========
</TABLE>
     Excluding debt securities issued by the U.S. government and corporate debt
     securities, AMIG Ltd. is not exposed to any significant credit
     concentration of risk on its investments.

                                       28

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

5.   INVESTMENTS (cont'd)

<TABLE>
<CAPTION>
                                            Cost or        Gross        Gross      Estimated
                                           Amortized    Unrealized   Unrealized      Fair
                                             Cost          Gains       Losses        Value
                                          -----------  ------------ ------------  -----------
     <S>                                  <C>          <C>          <C>           <C>
     December 31, 2001

     Fixed maturity investments:
     Obligations of states and
       political subdivisions             $ 9,341,931   $  296,378  $   (73,685)  $ 9,564,624
     Corporate debt securities              2,017,420       32,185            -     2,049,605
     Mortgage-backed securities            17,170,492      748,088       (3,570)   17,915,010
                                          -----------   ----------  -----------   -----------
     Total fixed maturity investments      28,529,843    1,076,651      (77,255)   29,529,239
     Equity securities                     13,972,736    3,507,034     (923,576)   16,556,194
                                          -----------   ----------  -----------   -----------
     Total investments                    $42,502,579   $4,583,685  $(1,000,831)  $46,085,433
                                          ===========   ==========  ===========   ===========
</TABLE>

     The cost or amortized cost and estimated fair value of fixed maturity
     investments at December 31, 2002, by contractual maturity, are shown below.
     Expected maturities may differ from contractual maturities as borrowers may
     have the right to call or prepay obligations without penalties.

                                                  Amortized       Estimated
                                                     Cost        Fair Value
                                                 -----------    ------------

     Due in one year or less                     $   527,198    $    539,405
     Due after one year through five years         6,306,458       6,509,437
     Due after five years through ten years        3,201,299       3,312,414
     Due after ten years                           1,110,000       1,217,128
                                                 -----------    ------------
       Subtotal                                   11,144,955      11,578,384

     Mortgage-backed securities                   19,282,521      20,327,420
                                                 -----------    ------------
       Total                                     $30,427,476    $ 31,905,804
                                                 ===========    ============


     Information on sales and maturities of investments are as follows:

                                       2002          2001            2000

     Total proceeds                $28,946,287   $19,580,660     $44,970,615
     Gross gains                     1,182,992     1,789,884         868,521
     Gross losses                      669,290       803,462       1,037,340

                                       29

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

5.   INVESTMENTS (cont'd)

     Major categories of net interest and dividend income, and net capital
     realized gains (losses) on sales of investments are summarized as follows:

<TABLE>
<CAPTION>
                                                                         2002          2001          2000
     <S>                                                             <C>            <C>           <C>
     Interest earned:
       Fixed maturity investments                                    $ 1,865,794    $2,084,461    $2,072,196
       Short term investments and cash and cash
         equivalents                                                      20,074        40,556        64,342
     Dividends earned                                                    176,840       166,875       134,341
     Investment expenses                                                (174,930)     (170,350)     (126,500)
                                                                     -----------    ----------    ----------
     Net investment income                                           $ 1,887,778    $2,121,542    $2,144,379
                                                                     ===========    ==========    ==========
     Net realized capital gains (losses) on sales of investments:

       Fixed maturity investments                                        327,555        22,468      (108,894)
       Equity securities                                                 186,147       963,954       (59,925)
     Realized loss on other than temporary impairment                $(1,518,887)            -             -
                                                                     -----------    ----------    ----------
     Net realized capital gains (losses)                             $(1,005,185)      986,422      (168,819)
                                                                     ===========    ==========    ==========
</TABLE>

6.   LIABILITY FOR LOSSES AND LOSS ADJUSTMENT EXPENSES

     Details of the liability for unpaid losses and loss adjustment expenses and
     related reinsurance recoveries receivable at December 31, 2002 and 2001 are
     as follows:

<TABLE>
<CAPTION>
                                           2002                                          2001
                            Gross       Reinsurance        Net           Gross       Reinsurance        Net
                          Liability     Recoverable     Liability      Liability     Recoverable     Liability
                          ---------     -----------     ---------      ---------     -----------     ---------
     <S>                 <C>            <C>            <C>            <C>            <C>            <C>
     Case basis
      estimates          $ 5,643,222     $(151,000)    $ 5,492,222    $ 4,648,083      $(151,000)   $ 4,497,083
     IBNR                 24,835,621      (523,223)     24,312,398     24,594,542       (523,223)    24,071,319
                         -----------     ---------     -----------    -----------      ---------    -----------
     Totals              $30,478,843     $(674,223)    $29,804,620    $29,242,625      $(674,223)   $28,568,402
                         ===========     =========     ===========    ===========      =========    ===========
</TABLE>

                                       30

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

6.   LIABILITY FOR LOSSES AND LOSS ADJUSTMENT EXPENSES (cont'd)

     Unpaid losses and loss adjustment expense activity is as follows:

                                            2002          2001          2000

     Liability net of reinsurance
       balances recoverable             $28,568,402   $27,028,862   $24,362,806
                                        -----------   -----------   -----------
     Incurred related to:
       Current year                       6,045,411     6,088,398     6,231,210
       Prior years                         (577,001)      (22,742)            -
                                        -----------   -----------   -----------
       Total incurred                     5,468,410     6,065,656     6,231,210
                                        -----------   -----------   -----------
     Paid related to:
       Current year                        (138,324)     (168,017)     (116,871)
       Prior years                       (4,093,868)   (4,358,099)   (3,448,283)
                                        -----------   -----------   -----------
       Total paid                        (4,232,192)   (4,526,116)   (3,565,154)
                                        -----------   -----------   -----------
     Liability net of reinsurance
       balances recoverable             $29,804,620   $28,568,402   $27,028,862
                                        ===========   ===========   ===========


     As a result of the change in estimates of insured events in prior years,
     the provision for losses and loss expenses decreased by $577,001 in 2002,
     $22,742 and $0 in 2001 and 2000, respectively. The 2002 decrease related
     mainly to positive development in the fiscal years 1988 to 1999. The 2001
     decrease related mainly to positive loss development in the fiscal years
     1988 to 1996.

7.   NET PREMIUMS EARNED

     A reconciliation of assumed to net premiums, on both a written and an
     earned basis is as follows:

<TABLE>
<CAPTION>
                                        2002                     2001                      2000
                               Written       Earned      Written      Earned       Written      Earned
                               -------       ------      -------      ------       -------      ------
     <S>                     <C>          <C>          <C>          <C>          <C>          <C>
     Assumed                 $6,938,801   $6,715,830   $6,738,231   $6,400,322   $6,276,434   $6,544,342
     Retroceded                  59,577       59,577            -            -            -            -
                             ----------   ----------   ----------   ----------   ----------   ----------
     Net premiums            $6,998,378   $6,775,407   $6,738,231   $6,400,322   $6,276,434   $6,544,342
                             ==========   ==========   ==========   ==========   ==========   ==========
</TABLE>

     Revisions to the estimates of ultimate premiums pursuant to the
     retrocession agreements resulted in additional reductions of retroceded
     premiums recorded of $59,577, $0 and $0 during 2002, 2001 and 2000,
     respectively.

                                       31

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

8.   OPERATING AND MANAGEMENT EXPENSES

     AMIG Ltd., AMIC Ltd., Mezco and Investco have no employees. Their operating
     activities, as well as certain management functions, are performed by
     contracted professional service providers. USA Offshore Management, Ltd.
     provides AMIG Ltd. and AMIC Ltd. certain management, administrative and
     operations services under the direction of the AMIG Ltd.'s Board of
     Directors pursuant to an agreement. The agreement may be terminated by
     either party within a period not exceeding ninety days and no less than 60
     days prior written notice. Operating and management expenses include
     compensation paid to members of the Board of Directors and various
     committees of the Board totaling $212,192 in 2002, $167,558 in 2001 and
     $188,950 in 2000.

9.   INCOME TAXES

     As at December 2, 1999 AIIG Inc. and AIIC Inc. transferred all assets and
     liabilities to AMIG Ltd. and AMIC Ltd., respectively (see Note 2).
     Following the Exchange, AIIG Inc. and AIIC Inc. were liquidated.

     Prior to the liquidation, United States deferred federal income taxes arose
     from temporary differences between the valuation of assets and liabilities
     as determined for financial reporting and tax purposes. Such temporary
     differences relate principally to unrealized gains and losses on
     investments, discounting of loss reserves, recognition of unearned premiums
     and deferred policy acquisition costs. At the date of the liquidation,
     remaining deferred United States federal income taxes assets of $596,028
     were written off to income. Significant permanent differences between book
     and taxable income include nontaxable municipal bond income, the dividends
     received deduction, and recovery of capital losses in excess of gains
     relating to a prior year.

     The components of the provision for income tax are as follows:

                                     2002          2001           2000

     Federal income tax
     Current tax (benefit)         $      -     $       -     $   (4,406)
     Deferred tax (benefit)               -             -              -
                                   --------     ---------     -----------
     Total federal income tax             -             -         (4,406)
     State income tax (benefit)           -             -              -
                                   --------     ---------     -----------
     Provision for income tax      $      -     $       -     $   (4,406)
                                   ========     =========     ===========

                                       32

<PAGE>

                         AMERINST INSURANCE GROUP, LTD.
                 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
                           December 31, 2002 and 2001
                           (expressed in U.S. dollars)

9.  INCOME TAX (cont'd)

    Reconciliation of income tax at the federal statutory rate to the Company's
    provision for income tax is as follows:

                                              2002      2001       2000

    Income tax at federal statutory rate    $     -   $      -   $      -
    Effect of tax exempt investment income        -          -          -
    State income taxes                            -          -          -
    Gain on portfolio transfer                    -          -          -
    Net operating loss carryforward               -          -          -
    Other                                         -          -     (4,406)
                                            -------   --------   --------
    Total                                   $     -   $      -   $ (4,406)
                                            =======   ========   ========

    Under current Bermuda law, the Company is not required to pay taxes in
    Bermuda on either income or capital gains. The Company has received an
    undertaking from the Bermuda government that, in the event of income or
    capital gains taxes being imposed, the Company will be exempted from such
    taxes until the year 2016.

10. DIVIDEND RESTRICTIONS AND STATUTORY REQUIREMENTS

    Under Companies' Bermuda law, AMIG Ltd. is prohibited from declaring or
    paying a dividend at December 31, 2002 if such payment would reduce the
    realizable value of its assets to an amount less than the aggregate value of
    its liabilities ($34,497,827), issued share capital ($331,751) and share
    premium (additional paid-in capital in the amount of $6,801,870) accounts.
    As at December 31, 2002, $17,716,736 was available to stockholders.

    AMIG Ltd.'s ability to pay common shareholders' dividends and its operating
    expenses is dependent on cash dividends from AMIC Ltd. including its
    subsidiary, Investco (collectively the "reinsurance subsidiaries"). The
    payment of such dividends by the reinsurance subsidiaries to AMIG Ltd. is
    limited under Bermuda law by the Bermuda Insurance Act 1978 and related
    regulations as amended which require that AMIC Ltd. maintain minimum levels
    of solvency and liquidity. For the years ended December 31, 2002 and 2001
    these requirements have been met. The minimum required statutory capital and
    surplus was $4,571,826 and $4,344,963 and actual statutory capital and
    surplus was $16,005,873 and $17,214,779 at December 31, 2002 and 2001. The
    minimum required level of liquid assets was $35,102,366 and $32,708,085 and
    actual liquid assets were $62,809,027 and $60,825,559 at December 31, 2002
    and 2001, respectively.

                                       33

<PAGE>

11. UNAUDITED QUARTERLY FINANCIAL DATA

<TABLE>
<CAPTION>
     2002                                        FIRST          SECOND          THIRD      FOURTH
                                                QUARTER        QUARTER         QUARTER     QUARTER
     <S>                                       <C>            <C>            <C>          <C>
     Reinsurance:
      Net premiums earned                      $1,712,320     $1,585,148     $1,382,612   $ 2,095,327
      Net investment income (loss)                434,073        500,007        599,778       353,920
      Net realized gain (loss)                    293,360        588,508       (129,060)   (1,757,993)
                                               ----------     ----------     ----------    ----------
     Total revenues                             2,439,753      2,673,663      1,853,330       691,254
                                               ==========     ==========     ==========    ==========

     Income (loss) before income taxes         $  170,063     $  559,151     $  (17,872)  $(1,452,902)

     Net income (loss)                         $  170,063     $  559,151     $  (17,872)  $(1,452,902)

     Basic and diluted net (loss) income       $     0.55     $     1.80     $    (0.06)  $     (4.69)
     per share

<CAPTION>
   2001                                          FIRST          SECOND          THIRD      FOURTH
                                                QUARTER        QUARTER         QUARTER     QUARTER
     <S>                                       <C>            <C>            <C>          <C>
     Reinsurance:
      Net premiums earned                      $1,654,406     $1,501,212     $1,600,860   $1,643,844
      Investment income (loss)                    771,389        694,484        603,810    1,038,281
                                               ----------     ----------     ----------   ----------
     Total revenues                             2,425,795      2,195,696      2,204,670    2,682,125
                                               ==========     ==========     ==========   ==========

     Income (loss) before income taxes         $   97,167     $  (69,423)    $   97,759   $  625,589

     Net income (loss)                         $   97,167     $  (69,423)    $   97,759   $  625,589

     Basic and diluted net (loss) income       $     0.31     $    (0.22)    $     0.31   $     1.97
     per share
</TABLE>

                                       34

<PAGE>

                        REPORT OF INDEPENDENT ACCOUNTANTS

                         ON FINANCIAL STATEMENT SCHEDULE

                          INDEPENDENT AUDITORS' REPORT

To the Board of Directors and Shareholders
Of AmerInst Insurance Group, Ltd.

We have audited the consolidated financial statements of AmerInst Insurance
Group, Ltd. and subsidiaries as of December 31, 2002 and for each of the three
years then ended and have issued our report thereon dated March 21, 2003; such
financial statements and report are included on page 17 of this Form 10-K. Our
audits also included the financial statement schedules of AmerInst Insurance
Group, Ltd. listed in the Index on page 15. These financial statement schedules
are the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audit. In our opinion, such financial statements
schedules, when considered in relation to the basic financial statements taken
as a whole, present fairly in all material respects the information set forth
therein.

/s/ Deloitte & Touche

Hamilton, Bermuda
March 21, 2003

                                       35

<PAGE>

INVESTMENTS--SCHEDULE I

                         AmerInst Insurance Group, Ltd.
                       Consolidated Summary of Investments
                             as of December 31, 2002

                                                                 Amount at which
                                                     Market       shown in the
Type of investment                  Cost (1)          Value       Balance Sheet
------------------                 -----------     -----------   ---------------

Fixed maturity investments:
  Bonds:
    United States Government and
     Agencies and authorities      $19,282,522     $20,327,420     $20,327,420
    States, municipalities and
     political subdivisions          7,954,915       8,443,346       8,443,346
    All other corporate bonds        3,190,039       3,135,038       3,135,038
                                   -----------     -----------     -----------
      Total fixed maturities        30,427,476      31,905,804      31,905,804
                                   -----------     -----------     -----------
Equities:
  Common stocks:
    Bank, trust and insurance
     companies                       1,668,235       1,205,526       1,205,526
    Industrial, miscellaneous
     and all other                  10,841,335      13,155,976      13,155,976
                                   -----------     -----------     -----------
      Total equities securities     12,509,570      14,361,502      14,361,502
                                   -----------     -----------     -----------
Total investments                  $42,937,046     $46,267,306     $46,267,306
                                   ===========     ===========     ===========


(1) Original cost of equity securities and, as to fixed maturities, original
    cost reduced by repayments and adjusted for amortization of premiums or
    accrual of discounts.

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

AMERINST INSURANCE GROUP, LTD.

REINSURANCE--SCHEDULE IV


Year Ended  Column A     Column B   Column C   Column D   Column E    Column F
----------  --------     --------   --------   --------   --------    --------
                                                                     % Assumed
                           Gross     Ceded to  Assumed      Net        To Net
             Line of      Premium     Other    Premiums   Premiums     Premiums
            Business      Written   Companies   Written    Written      Written
            --------      --------  ---------  ---------  ---------    ---------

12/31/02   Professional
            Liability            -     59,577  6,938,801  6,998,378       99.1%
12/31/01   Professional
            Liability            -          -  6,738,231  6,738,231      100.0%
12/31/00   Professional
            Liability            -          -  6,276,434  6,276,434      100.0%

                                       36

<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, 2003                    AMERINST INSURANCE GROUP, LTD.
        --------------

                                          By:  /s/ Stuart H. Grayston
                                               -----------------------------
                                               Stuart H. Grayston, President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Registrant and
in the capacities and as of the dates indicated.

Signature                              Title                      Date
---------                              -----                      ----

/s/ Stuart H. Grayston       President and Director               March 31, 2003
------------------------       (Principal Executive Officer)      --------------
Stuart H. Grayston

/s/ Murray Nicol             Vice-President, Treasurer            March 31, 2003
------------------------       and Director                       --------------
Murray Nicol                 (Principal Financial and
                               Accounting Officer)

/s/ Ronald S. Katch          Director and Chairman                March 31, 2003
------------------------       of the Board                       --------------
Ronald S. Katch

/s/ Bruce W. Breitweiser     Director and Vice-Chairman           March 31, 2003
------------------------       of the Board                       --------------
Bruce W. Breitweiser

/s/ Jerome A. Harris         Secretary and Director               March 31, 2003
------------------------                                          --------------
Jerome A. Harris

/s/ David N. Thompson        Asst. Secretary and Director         March 31, 2003
------------------------                                          --------------
David N. Thompson

/s/ Irvin F. Diamond         Director                             March 31, 2003
------------------------                                          --------------
Irvin F. Diamond

/s/ Jeffry I. Gillman        Director                             March 31, 2003
------------------------                                          --------------
Jeffry I. Gillman

/s/ Jerrell A. Atkinson      Director                             March 31, 2003
------------------------                                          --------------
Jerrell A. Atkinson

                                       37

<PAGE>

I Stuart Grayston, President of the AmerInst Insurance Group, Ltd. certify that:

     1.   I have reviewed this year-end report on Form 10-K of AmerInst
          Insurance Group, Ltd;

     2.   based on my knowledge, the report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary in order to make the statements made, in light of the
          circumstances under which such statements were made, not misleading
          with respect to the period covered by the report;

     3.   based on my knowledge, the financial statements, and other financial
          information included in the report, fairly present in all material
          respects the financial condition, results of operations and cash flows
          of the issuer as of, and for, the periods presented in the report;

     4.   The other certifying officer and I are responsible for establishing
          and maintaining "disclosure controls and procedures" (as defined in
          Section 302(a)(4) of the Act) for the issuer;

          a.   have designed such disclosure controls and procedures to ensure
               that material information is made known to them, particularly
               during the period in which the periodic report is being prepared;

          b.   have evaluated the effectiveness of the issuer's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of the report; and

          c.   have presented in the report their conclusions about the
               effectiveness of the disclosure controls and procedures based on
               the required evaluation as of that date;

     5.   The other certifying officer and I have disclosed to the issuer's
          auditors and to the audit committee of the Board of Directors:

          a.   all significant deficiencies in the design or operation of
               internal control which could adversely affect the issuer's
               ability to record, process, summarize and report financial data
               and have identified for the issuer's auditors any material
               weaknesses in internal controls; and

          b.   any fraud, whether or not material, that involves management or
               other employees who have a significant role in the issuer's
               internal controls; and

     6.   The other certifying officer and I have indicated in the report
          whether or not there were significant changes in internal controls or
          in other factors that could significantly affect internal controls
          subsequent to the most recent date of their evaluation, including any
          corrective actions with regard to significant deficiencies and
          material weaknesses.

Date: March 31, 2003                          By: /s/ Stuart Grayston
      -----------------                           -------------------
                                                  Stuart Grayston
                                                  President

                                       38


<PAGE>

I Murray Nicol, Vice President and CFO of the AmerInst Insurance Group, Ltd.
certify that:

     1.   I have reviewed this year-end report on Form 10-K of AmerInst
          Insurance Group, Ltd;

     2.   based on my knowledge, the report does not contain any untrue
          statement of a material fact or omit to state a material fact
          necessary in order to make the statements made, in light of the
          circumstances under which such statements were made, not misleading
          with respect to the period covered by the report;

     3.   based on my knowledge, the financial statements, and other financial
          information included in the report, fairly present in all material
          respects the financial condition, results of operations and cash flows
          of the issuer as of, and for, the periods presented in the report;

     4.   The other certifying officer and I are responsible for establishing
          and maintaining "disclosure controls and procedures" (as defined in
          Section 302(a)(4) of the Act) for the issuer;

          a.   have designed such disclosure controls and procedures to ensure
               that material information is made known to them, particularly
               during the period in which the periodic report is being prepared;

          b.   have evaluated the effectiveness of the issuer's disclosure
               controls and procedures as of a date within 90 days prior to the
               filing date of the report; and

          c.   have presented in the report their conclusions about the
               effectiveness of the disclosure controls and procedures based on
               the required evaluation as of that date;

     5.   The other certifying officer and I have disclosed to the issuer's
          auditors and to the audit committee of the Board of Directors:

          a.   all significant deficiencies in the design or operation of
               internal control which could adversely affect the issuer's
               ability to record, process, summarize and report financial data
               and have identified for the issuer's auditors any material
               weaknesses in internal controls; and

          b.   any fraud, whether or not material, that involves management or
               other employees who have a significant role in the issuer's
               internal controls; and

     6.   The other certifying officer and I have indicated in the report
          whether or not there were significant changes in internal controls or
          in other factors that could significantly affect internal controls
          subsequent to the most recent date of their evaluation, including any
          corrective actions with regard to significant deficiencies and
          material weaknesses.

Date: March 31, 2003                             By: /s/ Murray Nicol
      -----------------                              --------------------
                                                     Murray Nicol
                                                     Vice President & CFO

                                       39


<PAGE>

                                INDEX TO EXHIBITS
                          YEAR ENDED DECEMBER 31, 2002

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

 3(i)     Memorandum of Association of the Company (1)
 3(ii)    Bye-laws of the Company (1)
 4.1      Section 47 of the Company's Bye-laws -- included in Exhibit 3(ii)
          above
 4.2      Statement of Share Ownership Policy, as Amended (9)
10.1      Reinsurance Treaty between AIIC and Virginia Surety Company, Inc. (2)
10.2      Agreement between Country Club Bank and AIIC (2)
10.3      Agreement between Country Club Bank and AIIG (2)
10.4      Reinsurance Treaty between AIIC and CNA Insurance Companies (3), 1994
          placement slip (4) 1995 placement slip (5) 1996 placement slip (6)
          1997 placement slip (8) 1998 placement slip (10) and Endorsement No. 1
          to the Treaty effective July 1, 1999 (11)
10.5      Revised Management Agreement between Vermont Insurance Management,
          Inc. and AIIC dated May 1, 1997 (7) Addenda to Management Agreement
          dated July 1, 1997 (8) Addenda to Management Agreement dated July 1,
          1998 (10) Management Agreement between USA Offshore Management, Ltd.
          and AmerInst Insurance Company Ltd. dated as of December 2, 1999 (12)
          and Addenda to Agreement between AmerInst Insurance Company Ltd. and
          USA Offshore Management, Ltd. dated June 2, 2000 (12).
10.6      Escrow Agreement among AIIC, United States Fire Insurance Company and
          Harris Trust and Savings Bank dated March 7, 1995 (5)
10.7      Security Trust Agreement among AIIC, Harris Trust and Savings Bank and
          Virginia Surety Company, Inc. dated March 9, 1995 (5) and Agreement of
          Resignation, Appointment and Acceptance by and among AMIC Ltd., Harris
          Trust and Savings Bank and The Bank of New York dated as of May 8,
          2000 (13)
10.8      Investment Advisory Agreement For Discretionary Accounts between
          Amerinst Insurance Company and Harris Associates L.P. dated as of
          January 22, 1996, as amended by the Amendment to Investment Advisory
          Agreement for Discretionary Accounts dated as of April 2, 1996 (10)
10.9      Exchange Agreement between the Company and AMIG Ltd., dated as of
          January 20, 1999 (1)
10.10     Reinsurance Treaty between AMIC Ltd. and CNA Insurance Companies,
          effective December 1, 1999 (11)
10.11     Value Plan Reinsurance Treaty between AMIC Ltd. and CNA Insurance
          Companies, effective December 1, 1999 (11)
10.12     Trust Agreement among AMIC Ltd., Continental Casualty Company and
          Chase Manhattan Bank dated as of December 21, 2000 (12)
10.13     Investment Counsel Agreement between AMIC Ltd. and Northwest
          Investment Management, Inc. dated August 1, 2000 (13)
10.14     Registrar and Transfer Agent Agreement between AIC Ltd. and
          Butterfield Corporate Services Limited dated as of January 1, 2001
          (14)
10.15     Reinsurance Treaty between AIC Ltd. and CNA Insurance Companies,
          effective January 1, 2002 (15)
10.16     Value Plan Reinsurance Treaty between AIC Ltd. and CNA Insurance
          Companies, effective January 1, 2002 (15)
21        Subsidiaries of the Registrant (1)
99.1      President Certification pursuant to Section 906 of Sarbanes-Oxley Act
          of 2002.
99.2      Vice President Certification pursuant to Section 906 of Sabanes-Oxley
          Act of 2002.
--------------------------

(1) Filed with the Company's Registration Statement on Form S-4, Registration
    No. 333-64929 and incorporated herein by reference.

(2) Filed with AIIG's Annual Report on Form 10-K for the year ended December 31,
    1992 and incorporated herein by reference.

(3) Filed with AIIG's Annual Report on Form 10-K for the year ended

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<PAGE>

     December 31, 1993 and incorporated herein by reference.

(4)  Filed with AIIG's Annual Report on Form 10-K for the year ended December
     31, 1994 and incorporated herein by reference.

(5)  Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended
     September 30, 1995 and incorporated herein by reference.

(6)  Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended
     September 30, 1996 and incorporated herein by reference.

(7)  Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended June
     30, 1997 and incorporated herein by reference.

(8)  Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended
     September 30, 1997 and incorporated herein by reference.

(9)  Filed with AIIG's Annual Report on Form 10-K for the year ended December
     31, 1996 and incorporated herein by reference.

(10) Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended
     September 30, 1998 and incorporated herein by reference.

(11) Filed with the Company's Annual Report on Form 10-K for the year ended
     December 31, 1999.

(12) Filed with AIIG's Quarterly Report on Form 10-Q for the quarter ended June
     30, 2000 and incorporated herein by reference.

(13) Filed with AMIG LTD.'s Annual Report on Form 10-K for the year ended
     December 31, 2000 and incorporated herein by reference.

(14) Filed with the Company's Annual Report on Form 10-K for the year ended
     December 31, 2001.

(15) Filed with the Company's Quarterly Report on Form 10-Q for the quarter
     ended March 31, 2002 and incorporated herein by reference.

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