1
<PAGE>


                                  FORM 10-K
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

x   ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
                                   ACT OF 1934
                  For the fiscal year ended December 31, 2000
                                       OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ________ to ________

                         Commission file number: 0-14950
                              Argonaut Group, Inc.
             (Exact name of Registrant as specified in its charter)

                               Delaware 95-4057601
                (State or other jurisdiction of (I.R.S. Employer
               incorporation or organization) Identification No.)

        10101 Reunion Place, Suite 800
        San Antonio, Texas                              78216
   (Address of principal executive offices)           (Zip code)

                                 (210) 321.8400
               (Registrant's telephone number including area code)

       Securities  registered pursuant to section 12(g) of the Act:

                      Common Stock, par value of $.10 per share
                                Title of Securities

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No ____
        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|


As of  March  30,  2000,  registrant  had  21,611,585  shares  of  Common  Stock
outstanding,  and  the  aggregate  market  value  of the  voting  stock  held by
nonaffiliates was approximately $443.0 million.

                       DOCUMENTS INCORPORATED BY REFERENCE

Part II: Excerpts from Argonaut Group,  Inc.'s Annual Report to Shareholders for
the Year Ended December 31, 2000. Part III: Excerpts from Argonaut Group, Inc.'s
Proxy  Statement for the Annual Meeting of  Shareholders to be held on April 24,
2001.




                                       2
<PAGE>





                              Argonaut Group, Inc.
                           Annual Report on Form 10-K
                      For the Year Ended December 31, 2000


                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S>           <C>                                                            <C>


                                                   PART I

Item  1.      Business                                                         3
Item  2.      Properties                                                      11
Item  3.      Legal Proceedings                                               11
Item  4.      Submission of Matters to a Vote of Security Holders             13

                                                   PART II

Item  5.      Market for Registrant's Common Equity and Related               13
                   Stockholder Matters
Item  6.      Selected Financial Data                                         13
Item  7.      Management's Discussion and Analysis of                         13
                   Financial Condition and Results of Operations
Item  7A.     Quantitative and Qualitative Disclosures about Market Risk      14
Item  8.      Financial Statements and Supplementary Data                     14
Item  9.      Changes in and Disagreements with Accountants on
                   Accounting and Financial Disclosure                        14

                                                  PART III

Item 10.      Directors and Executive Officers of the Registrant              14
Item 11.      Executive Compensation                                          14
Item 12.      Security Ownership of Certain Beneficial Owners
                   and Management                                             14
Item 13.      Certain Relationships and Related Transactions                  15

                                                   PART IV

Item 14.      Exhibits, Financial Statement Schedules and Reports on Form 8-K 15
</TABLE>




                                    Page 2


                                       3
<PAGE>

                                     PART I
Item 1. Business

Introduction

Argonaut  Group,  Inc.  ("Argonaut  Group") is a national  provider of specialty
insurance  products focused on high quality customer service for specific niches
of  property-casualty  insurance.  Workers  compensation  accounted  for  80% of
premiums in 2000. See "Item 6. Selected  Financial  Data" for certain  financial
information regarding industry segments in which the Company operates.  Argonaut
Group is  incorporated  in  Delaware.  Argonaut  Group's  executive  offices are
located at 10101 Reunion Place, Suite 800, San Antonio,  Texas 78216,  telephone
210.321.8400.  The term  "the  Company"  refers  to  Argonaut  Group and all its
subsidiaries.

Argonaut  Insurance Company ("Argonaut  Insurance"),  Argonaut Group's principal
insurance   subsidiary,   was   established  in  California  in  1948.   Workers
compensation is the primary line of insurance written by Argonaut  Insurance and
its  subsidiaries:   Argonaut-Midwest   Insurance  Company,   Argonaut-Northwest
Insurance Company,  Argonaut-Southwest  Insurance Company, and Georgia Insurance
Company.  Argonaut  Insurance and these  subsidiaries  also write  complementary
lines of  commercial  insurance for a small number of their  clients,  primarily
consisting of general and automobile  liability,  but generally target companies
whose workers  compensation  needs will result in  significant  annual  premiums
(generally  between  $250,000  and $5  million)  in classes of  insurance  which
require specific  expertise to underwrite  prudently,  enhance the safety of the
workplace, and effectively manage losses through partnership with the insured.

Argonaut Great Central Insurance Company  ("Argonaut Great Central") is Argonaut
Group's  other  insurance  subsidiary.  Established  in  Illinois  in  1948  and
purchased by Argonaut Insurance in 1971,  Argonaut Great Central  specializes in
providing package insurance  policies  including  property,  general  liability,
workers  compensation,  and umbrella  coverage for certain  classes of insureds.
Argonaut Insurance is Argonaut Great Central's immediate parent.

AGI  Properties,  Inc. ("AGI  Properties"),  a non-insurance  company,  owns and
leases certain real properties. AGI Properties was incorporated in California in
1970. Argonaut Insurance is AGI Properties' immediate parent.

Products

The  Company has two primary  product  lines:  workers  compensation  insurance
and other  property-casualty  insurance.  Incorporated herein  by  reference is
the  information  appearing  as "Note 11 -  Business  Segments" in the Notes to
the  Consolidated  Financial Statements of the Annual Report.  See Exhibit
Index.

                                      Page 3


                                       4
<PAGE>







Workers Compensation

Workers  compensation  insurance  is  a  statutory  system  which  provides  for
compensation  of a  policyholder's  employees and their  dependents for injuries
(other than  self-inflicted  wounds) arising out of or suffered in the course of
the employee's  employment,  even though the injuries may have resulted from the
negligence  or wrongful  conduct of the  employee  himself or any other  person.
Workers  compensation  insurance is sold primarily by Argonaut Insurance and its
subsidiaries.  Net earned premiums for this line of business were $100.3 million
in 2000, $85.7 million in 1999 (before adjustment to the retro premium accrual),
and $115.6 million, in 1998.

Other Property-Casualty Insurance

This   product   includes   general   and   automobile   liability,   commercial
multiple-peril,  and  various  other  insurance  coverages.  Premiums  for these
product lines were $24.3  million,  $27.3 million,  and $22.9 million,  in 2000,
1999, and 1998, respectively.

Argonaut  Insurance offers general and automobile  liability and other insurance
to  commercial  clients in  conjunction  with  workers  compensation  insurance.
Liability  insurance  compensates  third parties for damages  resulting from the
actions of the insured.

Commercial  multiple-peril  insurance,  one of Argonaut Great Central's  primary
products, is a composite product designed for the small-to-medium sized business
which  needs  basic  insurance  coverage  and simple  insurance  administration.
Commercial  multiple-peril policies generally cover property,  plant, inventory,
general liability, and associated coverages.

Ceded Reinsurance

The Company's policy regarding  reinsurance is based upon the  capitalization of
the  subsidiaries.  The goal is to limit the  exposure  to surplus  from  losses
resulting from catastrophes and large or unusually hazardous risks.

As is the case with direct premiums written,  cessions on reinsurance  contracts
are recognized ratably over the period to which the premium relates.

Argonaut Insurance limits of retention on its primary excess of loss reinsurance
treaty remains the same as the prior year at $1,000,000.  Its limit of retention
is $250,000 on its wrap up treaty.  Argonaut Great  Central's limit of retention
remains  the same as the prior year at $500,000 on the  property  and  liability
treaty,  $300,000 on the First Workers'  Compensation Excess of Loss Reinsurance
Treaty and $250,000 on the First Underlying Excess of Loss Reinsurance Treaty.

Incorporated  herein by  reference  is the  information  appearing  as "Note 3 -
Reinsurance" in the Notes to the Consolidated Financial Statements of the Annual
Report. See Exhibit Index.




                                    Page 4

                                       5
<PAGE>

Competition

The  property-casualty  insurance industry is characterized by a large number of
competing companies and modest market shares by industry participants. According
to A.M.  Best Company  ("A.M.Best"),  a leading  insurance  industry  rating and
analysis firm, as of December 31, 1999, there were approximately  1,000 property
and casualty insurance  organizations operating in the United States, made up of
nearly 2,500 property-casualty insurance companies.
Industry wide, net premiums  earned totaled  approximately  283 billion for 1999
with the 100 largest companies  (groups and  unaffiliated)  writing about 89% of
the industry's premiums. Workers' Compensation earned was $22.0 billion or about
8.0% of all premiums  earned.  The Argonaut  Insurance Group is ranked among the
250 largest property and casualty insurance company  organizations in the United
States,  measured by net premiums written  (200th),  and  policyholder'  surplus
(77th).  With respect to admitted  assets,  Argonaut  Insurance Group ranks 95th
relative to its industry peers.

The Company's principal  competitors cannot be easily classified.  The Company's
principal  lines of  business  are  written  by  numerous  insurance  companies.
Competition  for any one account may come from a very large  national  firm or a
smaller  regional company selling either directly or through agents and brokers.
For the Company's principal line of business,  workers compensation,  additional
competition comes from state workers compensation funds.

Regulation

Since,  1994,  the  Company's  insurance  subsidiaries  have been subject to the
Risk-Based  Capital (RBC) for Insurers Model Act. The RBC calculation takes into
account:  (1) asset risk,  (2) credit risk, (3)  underwriting  risk, and (4) all
other relevant risks. The RBC for Insurers Model Act provides for four levels of
regulatory  authority:  (1) Company Action Level Event,  (2)  Regulatory  Action
Level Event, (3) Authorized Control Level Event, and (4) Mandatory Control Level
Event. These four levels of authority provide for increasing regulatory remedies
for companies that fail to comply with the RBC for Insurers Model Act.

As of December 31, 2000, the Company's insurance  subsidiaries' RBC coverage far
exceeds the minimum required.

The Company's  insurance  subsidiaries  are members of the  statutorily  created
insolvency  guarantee  associations  in all states where they are  authorized to
transact  business.  These  associations  were  formed for the purpose of paying
claims of  insolvent  companies.  The Company is assessed  its pro rata share of
such  claims  based  upon its  premium  writings,  subject  to a maximum  annual
assessment per line of insurance.  Such costs can generally be recovered through
surcharges on future premiums.  The Company does not believe that assessments on
current  insolvencies will have a material effect on its financial  condition or
results of operations.

The Company has no policyholder dividend restrictions.

Under the provisions of the California Insurance Code, there is a maximum amount
of  dividends  which  can be  paid  without  prior  approval  of  the  Insurance
Commissioner,  reduced by dividends  declared  during the prior  twelve  months.
Argonaut  Insurance  did not declare a dividend to Argonaut  Group,  Inc. in the
first quarter of 2001.

                                   Page 5


                                       6
<PAGE>

Marketing

Argonaut Insurance and Argonaut Great Central operate in substantially different
markets.

Incorporated  herein by  reference  is the  information  appearing  as "Note 1 -
Business and Significant  Accounting  Policies" in the Notes to the Consolidated
Financial Statements of the Annual Report. See Exhibit Index.

Argonaut  Insurance is authorized to operate in all 50 states.  Its primary line
of  business,  workers  compensation  insurance,  accounts  for 99% of its total
premiums. These policies are written on a retrospective rating basis, with large
deductible provisions,  or on a guaranteed cost basis. For retrospectively rated
policies,  Argonaut  Insurance's  risk  regarding  inadequate  price  levels  is
mitigated  to a  certain  extent  as the  insured  will  have to pay  additional
premiums (or will be refunded premiums) based upon their actual loss experience.

Argonaut  Great  Central is  authorized  to  operate in 33 states and  considers
itself to be a specialty  company with a defined target  market.  Argonaut Great
Central's   dominant   products  are  commercial   multiple-peril   and  workers
compensation  insurance.  Argonaut Great Central's policies are marketed through
agents.

 Argonaut  Insurance  does not market  any of their  policies  through  managing
general agents.  Argonaut Great Central  markets some of their policies  through
one managing general agent on a very limited basis.

Run Off Lines

Incorporated herein by reference is the information  appearing as "Note 12 - Run
Off Lines" in the Notes to the Consolidated  Financial  Statements of the Annual
Report. See Exhibit Index.

Investments

The Company's  investment  portfolio  continues to emphasize  high quality fixed
income  and  equity  investments.  As  a  percentage  of  the  total  investment
portfolio,  U.S.  Treasury  securities  comprise  the  largest  portion  of  the
Company's  holdings.  Obligations  of states  and  political  subdivisions  have
dramatically  decreased  from  1999 as a result of  maturities  and  sales.  The
proceeds  from  these  maturities  and sales  were  reinvested  in high  quality
preferred and common stocks and Other U.S. Agencies (FNMA and FHLM).

The  Company's  investment  policy is to  invest  only in  securities  issued by
investment-grade  issuers.  It does not invest in  high-yield or so called "junk
bonds," derivatives, speculative real estate, or mortgage backed securities.

Incorporated  herein by  reference  is the  information  appearing  as "Note 2 -
Investments"  and  "Note  7 -  Net  Investment  Income"  in  the  Notes  to  the
Consolidated Financial Statements of the Annual Report. See Exhibit Index.


                                     Page 6

                                       7
<PAGE>



Reserves for Losses and Loss Adjustment Expenses

Incorporated  herein by reference is the information set forth under the caption
"Management's  Discussion  and Analysis of Results of  Operations  and Financial
Condition-Results  of  Operations"  in the  Annual  Report  to  Shareholders  of
Argonaut  Group for the fiscal  year ended  December  31,  2000 and in "Note 4 -
Reserves  for  Losses  and  Loss  Adjustment  Expenses"  in  the  Notes  to  the
Consolidated Financial Statements of the Annual Report. See Exhibit Index.

Loss  deterioration  recognized in 2000 increased due to poor  experience in the
workers  compensation  line of business.  In particular,  loss experience in the
State of  California  was  worse  than  anticipated.  The  negative  effect of a
California legal ruling adverse to the industry in 1996 began manifesting itself
starting in 1999, and continuing through 2000 the workers compensation  industry
in California  has reported  results which have worsened with each quarter.  The
impact  of the  legal  ruling  can be seen  through  increased  claim  costs for
California workers compensation accidents which occurred in 1997 and thereafter.
This legal ruling was the 1996 Minnear Decision which gave a worker's  physician
complete control in determining all aspects of a worker's compensation leave and
return,  eliminating  any  input  from  insurers.  The full  effect of the legal
changes was delayed due to the nature of workers  compensation  injuries and the
sometimes  subjective  nature of the system which  administers the settlement of
workers'  claims.  It can take many months before the first  injured  worker has
gone through the system with a claim coming under new law and subsequent  claims
are  administered  according to the new standard in a trickle down manner.  As a
result, loss estimates  established by the Company,  and the industry,  in prior
years proved  inadequate with the passage of time. Upon actuarial  review of the
changing loss climate,  the Company increased workers compensation loss and loss
adjustment expense reserves by $124 million during 2000.

The  Company  faces  continued  uncertainty  due to  its  exposure  to  asbestos
liability  insurance.  The  Company  wrote  insurance  in the 1970's for a small
number of asbestos manufacturers and contractors. Due to the long latency period
of asbestos related diseases,  these types of claims continue to be administered
by the  Company.  During  2000 the Company  recorded a $10  million  increase in
reserves for loss  adjustment  expense to reflect the ongoing  costs of handling
these types of claims.  Reserves,  net of reinsurance,  for environmental claims
were  $74.9   million  and  $91.3   million  at  December  31,  2000  and  1999,
respectively.  Reserves, net of reinsurance,  for asbestos claims were $79.8 and
$75.3 million at December 31, 2000 and 1999.

In the opinion of  management,  the Company's  reserves  represent the Company's
best  estimate of its  ultimate  liabilities,  based on  currently  known facts,
current law, current  technology,  and assumptions  considered  reasonable where
facts are not known.  Due to the significant  uncertainties  mentioned above and
related management  judgments,  there can be no assurance that future changes in
loss development, favorable or unfavorable, will not occur.

The following  tables on page 8 and 9 indicate the manner in which  reserves for
losses and loss  adjustment  expenses at the end of a particular  year change as
time passes.  Table I presented is net of the effects of  reinsurance.  Table II
presented includes only amounts related to direct insurance.

                                     Page 7

                                       8
<PAGE>

In the  following  tables,  the first  line  shows the  reserves  as  originally
reported at the end of the stated year.  The second section shows the cumulative
amounts paid as of the end of successive  years related to those  reserves.  The
third section shows the original  recorded  reserves as of the end of successive
years adjusted to reflect facts and  circumstances  later  discovered.  The last
line, cumulative deficiency or redundancy, compares the adjusted reserves to the
reserves as  originally  established  and shows that the reserves as  originally
recorded  were either  inadequate  or excessive to cover the  estimated  cost of
claims as of December 31, 2000.


Table I


              Analysis of Losses and Loss Adjustment Expenses (LAE) Development
                                          (in millions)
                                      (Net of Reinsurance)
<TABLE>
<CAPTION>

                          1991       1992      1993        1994      1995       1996      1997       1998      1999       2000
                          ----       ----      ----        ----      ----       ----      ----       ----      ----       ----
<S>                      <C>        <C>       <C>         <C>       <C>        <C>       <C>       <C>       <C>        <C>
Reserves for Losses
and LAE (a)              $1,287.8   $1,201.9  $1,107.6     $976.6    $858.1     $951.0    $884.0     $763.2    $706.5     $757.6
Cumulative Amount
Paid as of: (b)
One year later              307.3      276.9     259.9      239.7     214.2      179.0     172.7      149.8     160.9
Two years later             525.8      489.2     444.7      417.9     356.2      309.7     278.7      274.0
Three years later           697.6      638.9     588.8      531.5     468.6      392.7     374.1
Four years later            821.4      759.5     684.1      623.9     537.9      469.5
Five years later            919.5      839.9     758.5      682.9     606.2
Six years later             991.0      906.8     814.8      742.4
Seven years later         1,051.3      962.7     864.8
Eight years later         1,106.0    1,010.3
Nine years later          1,151.4
Reserves Re-estimated
as of:
One year later            1,285.2    1,197.1   1,086.8      996.5   1,073.6      934.0     819.2      785.4     833.9
Two years later           1,311.9    1,202.0   1,083.0    1,180.8   1,038.9      895.5     851.1      884.3
Three years later         1,203.0    1,283.4   1,159.2    1,014.1     916.0      922.8   1,315.9
Four years later          1,403.1    1,277.3   1,152.5    1,033.8     979.4    1,325.9
Five years later          1,400.6    1,268.2   1,154.6    1,092.6   1,514.9
Six years later           1,524.3    1,396.2   1,262.2    1,202.0
Seven years later         1,518.8    1,391.3   1,299.8
Eight years later         1,516.7    1,428.9
Nine years later          1,550.2
Cumulative (Deficiency)
Redundancy: (c)          ($262.4)   ($227.0)  ($192.2)   ($225.4)  ($234.5)    ($28.4)   ($38.8)   ($121.1)  ($127.4)
</TABLE>
<TABLE>
<CAPTION>
<S>    <C>

(a)    Reserves for losses and LAE, net of reserves for reinsurance.
(b)    Cumulative amount paid, net of reinsurance payments.
(c)    Represents  changes of net reserves between the original  estimate (for
       each accident year) of the indicated year and the reserve  re-estimated
       as of the end of the current year. Re-estimated reserves are calculated
       by adding  cumula- tive amount paid to unpaid loss and LAE and incurred
       but not reported (IBNR) at year end for each accident year.
</TABLE>


                                    Page 8






                                       9
<PAGE>

Table II


              Analysis of Losses and Loss Adjustment Expenses (LAE) Development
                                          (in millions)
                                       (Direct Insurance Only)

<TABLE>
<CAPTION>

                        1991      1992       1993      1994      1995       1996      1997      1998      1999      2000
                        ----      ----       ----      ----      ----       ----      ----      ----      ----      ----
<S>                    <C>       <C>        <C>       <C>       <C>        <C>       <C>       <C>        <C>      <C>
Reserves for Losses
and LAE (a)            $1,494.4  $1,390.9   $1,284.1  $1,161.5  $1,026.1   $1,158.8 $1,063.2    $935.8    $897.4   $930.7
Cumulative Amount
Paid as of: (b)
One year later            355.7     325.6      288.3     267.5     245.2      234.7    197.0     177.8     218.9
Two years later           621.6     564.4      499.3     474.8     437.8      389.3    329.6     358.2
Three years later         818.2     739.3      668.9     625.4     572.1      498.5    479.0
Four years later          965.1     884.2      787.9     737.5     665.5      617.0
Five years later        1,086.1     983.5      881.4     817.9     774.0
Six years later         1,174.5   1,069.3      951.1     916.0
Seven years later       1,253.6   1,134.2    1,039.2
Eight years later       1,314.3   1,219.5
Nine years later        1,396.6
Reserves Re-estimated
as of:
One year later          1,512.6   1,414.2    1,291.7   1,179.7   1,300.3   1,159.7   1,006.2     990.1   1,048.3
Two years later         1,570.2   1,448.8    1,278.8   1,423.1   1,282.8   1,134.3   1,069.7   1,108.6
Three years later       1,603.7   1,440.6    1,533.8   1,404.1   1,267.2   1,182.5   1,156.5
Four years later        1,604.2   1,694.5    1,526.6   1,412.1   1,317.3   1,248.4
Five years later        1,841.5   1,687.5    1,532.5   1,440.9   1,379.7
Six years later         1,850.4   1,698.0    1,546.4   1,489.9
Seven years later       1,859.5   1,708.6    1,585.5
Eight years later       1,869.4   1,746.2
Nine years later        1,900.8
Cumulative (Deficiency)
Redundancy: (c)         ($406.4)  ($355.3)   ($301.4)  ($328.4) ($353.6)    ($89.6)   ($93.3)  ($172.8)  ($150.9)

</TABLE>
<TABLE>
<CAPTION>
<S>    <C>

(a)    Reserves for losses and LAE, excluding effects of reinsurance.
(b)    Cumulative amount paid, excluding effects of reinsurance.
(c)    Represents  changes of direct  reserves  between the original  estimate
       (for  each  accident  year)  of the  indicated  year  and  the  reserve
       re-estimated as of the end of the current year.  Re-estimated  reserves
       are calculated by adding  cumulative amount paid to unpaid loss and LAE
       and incurred but not reported (IBNR) at year end for each accident
       year.
</TABLE>



                                Page 9


<PAGE>                            10





Capital Adequacy

Several  measures  of  capital  adequacy  are  common  in the  property-casualty
industry.  The two most often used are (a)  premium-to-surplus  (which  measures
pressures  on capital from  inadequate  pricing)  and,  (b)  reserves-to-surplus
(which  measures  pressures on capital from  inadequate loss and loss adjustment
expense reserves).

The   following   table   shows   the   consolidated    premium-to-surplus   and
reserves-to-surplus  ratios  of  the  Company's  insurance  subsidiaries  (on  a
statutory basis).


                                     Year Ended December 31,
                                    ------------------------
                                      2000       1999        1998
                                    ------      -----       -----
Ratio of:
Premium-to-surplus              0.3          0.2       0.2
                                ===          ===       ===

Reserves-to-surplus             2.1           1.2          1.1
                                ===           ===          ===

The Company believes that its 2000 capital ratios are satisfactory.

Ratings

The  Company's  insurance  subsidiaries  are rated by A.M.  Best.  A.M.  Best is
generally  considered to be the leading insurance rating agency, and its ratings
are used by insurance buyers,  agents and brokers, and other insurance companies
as an  indicator of financial  strength  and  security,  and are not intended to
reflect  the  quality of the rated  company for  investment  purposes.  Argonaut
Insurance  and its pooled  subsidiaries  currently  carries  an "A"  (Excellent)
rating.  Argonaut  Great  Central  is  rated  separately  and  carries  an  "A-"
(Excellent) rating.

Standard  &  Poor's  currently  rates  the  claims-paying  ability  of  Argonaut
Insurance  and its pooled  subsidiaries  as "A" and  Argonaut  Great  Central as
"Api".

Employees

At December 31, 2000,  the Company  employed 435  full-time  employees.  Of this
total, Argonaut Insurance employed 354 people (300  professional/managerial  and
54  clerical/operational).   Argonaut  Great  Central  employed  70  people  (43
professional/managerial and 27 clerical/operational). Argonaut Group employed 11
people (10 professional/managerial  and 1 clerical/operational).  The Company is
not a party to any collective bargaining agreements.







                                                     Page 10

                                       11
<PAGE>



Item 2. Properties

Argonaut Insurance's  headquarters are located in a facility that consists of an
office building on  approximately  two acres of land in Menlo Park,  California.
Argonaut  Great  Central's  headquarters  are  located in a facility  in Peoria,
Illinois.  Argonaut  Insurance  and Argonaut  Great Central own the buildings in
which their headquarters are located. In addition,  the Company has entered into
short term  leases in  conjunction  with its  operations  at  various  locations
throughout  the country.  The Company  believes that its properties are adequate
for its present needs.

Item 3. Legal Proceedings

On August 30, 1996,  following a dispute over  reimbursement  of amounts owed to
Argonaut  Insurance and cancellation of certain  insurance  programs by Argonaut
Insurance,  the Los Angeles County Metropolitan  Transportation  Authority (MTA)
filed a civil action against  Argonaut  Insurance  alleging  breach of contract,
breach of the covenant of good faith and fair dealing,  and requesting ancillary
relief in the form of an accounting, an injunction and restitution in connection
with  allegations  regarding  failures to perform  under  certain  contracts  of
insurance.  The MTA contended that it has been damaged by an unspecified amount.
The Company  believes it has  meritorious  defenses,  and intends to  vigorously
contest MTA's claims.

Argonaut Insurance responded to the Complaint and brought certain  counterclaims
against the MTA, and possibly  others,  in connection with the facts  underlying
the  lawsuit.   These   counterclaims   include  counts  for  unpaid   insurance
deductibles.  The trial judge for the MTA  litigation has ordered that the first
stage of this case commence in October 2001. That trial will primarily  consider
a portion of Argonaut  Insurance's  counterclaim for sums it contends are due to
it from the MTA. The Company is unable, with any degree of certainty, to comment
upon the range of any potential  loss, or whether such an outcome is probable or
remote,  in  light of the  limited  discovery  conducted  in the  case,  and the
preliminary investigation conducted thus far.

Argonaut  Insurance and certain of its insurance  subsidiaries have been sued in
the  following  referenced  lawsuits  brought  on behalf of  alleged  classes of
purchasers of retrospectively  rated worker's compensation  insurance,  alleging
that  the  defendants,   including  other  compensation  insurers,  charged  the
purported class unlawful premiums. The lawsuits are Bristol Hotel Asset Company,
et al.; v. The Aetna  Casualty  and Surety  Company,  et al.;  Civil  Action No.
97-92-I, pending in the Chancery Court for Davidson County, Tennessee,  filed on
January 8, 1997;  Bristol Hotel  Management  Corp.,  et al. v. Aetna  Casualty &
Surety Co. A/K/A Aetna Group,  et al.; Civil Action No. CL 9700727A,  pending in
the  Circuit  Court of the  Fifteenth  Judicial  Circuit,  in and for Palm Beach
County, Florida, filed on March 18, 1997; Bristol Hotel Management Corp., et al.
v.  Aetna  Casualty  & Surety  Co.  A/K/A  Aetna  Group,  et al.;  Civil  Action
No.97-2240,  pending  in the  United  States  District  Court  for the  Southern
District  of  Florida,  Miami  Division,  filed  on  July  17,  1997;  Foodarama
Supermarkets, Inc. et al.;



                                   Page 11


                                       12
<PAGE>

     v. Aetna Casualty & Surety Co., et al.;  Docket No.  L-3556-97,  pending in
the Superior Court of New Jersey Law Division,  Morris County, filed on November
17, 1997; CR/PL  Management Co., et al. v. Allianz  Insurance  Company,  et al.;
Civil Action No. 98-01635; pending in the Circuit Court of Cook County, Illinois
County  Department,   Chancery  Division,   filed  February  6,  1998;  American
Freightways,  Inc. et al.; v. The American Insurance  Company,  et al.; Case No.
982-00338;  pending  in the  Circuit  Court of the City of St.  Louis,  State of
Missouri, filed on February 17, 1998; Foodrama Supermarkets, Inc., et al. v. The
American  Insurance  Company,  et al.; Civil Action No.  001138;  pending in the
Court of Common Pleas,  Philadelphia County,  Civil Division,  filed on April 8,
1998;  Sandwich  Chef of Texas,  Inc.,  et al. v.  Reliance  National  Indemnity
Insurance  Company,  et al., Case No. 98-01631;  In the District Court of Harris
County, Texas, 295th Judicial District, was filed on May 6, 1998; AARP, et al.v.
National  Surety Corp.,  et al., No.  98-820589-CZ;  pending in the Wayne County
Circuit Court, State of Michigan,  was filed on June 30, 1998; Alumax,  Inc., et
al. v. Allianz Insurance Company,  et al., Case No.  CV98032222;  In the Circuit
Court of Jefferson County,  Alabama,  was filed on May 21, 1998; Burnham Service
Corp.,  et al. v. NCCI,  Inc.,  et al., Case No.  9800321;  Supreme Court of the
State of New  York,  County of New York,  was  filed on June 30,  1998;  Payless
Cashways,  Inc., et al. v.  National  Surety  Corp.,  et al., Case No.  9812388;
pending in the Fayette Circuit Court, Division 1, Commonwealth of Kentucky,  was
filed on June 30,  1998;  and Albany  International  Corp.,  et al. v.  American
National Fire Insurance Co., et al., Case No. CV98-11695;  Superior Court of the
State of Arizona,  County of Maricopa,  was filed on June 26, 1998.  The Company
intends to vigorously defend these lawsuits. Plaintiffs have threatened to bring
similar claims against Argonaut Insurance in several other states. Management is
unable to determine the  potential  financial  impact of these  lawsuits at this
time.

Argonaut  Insurance  is a defendant in a case  entitled  Diamond  Woodworks  vs.
Argonaut Insurance Company, in the Superior Court of Orange County,  California.
The case arose out of Argonaut  Insurance  Company's  alleged  mishandling  of a
workers compensation claim and alleged fraudulent acts towards the plaintiff. On
June 19, 2000 the jury awarded  approximately  $700,000 in compensatory  damages
and $14  million in punitive  damages  against the  Company,  which  verdict was
subsequently  confirmed by the Court.  Argonaut  Insurance  filed post  judgment
motions and the judgment for punitive damages was reduced to $5.5 million.

Argonaut Insurance is pursuing an appeal of the adverse final judgment,  and has
posted a surety bond for the judgement pending appeal.  The Company has recorded
the  $700,000  judgment for  compensatory  damages but has not recorded the $5.5
million  judgment  for  punitive  damages.  Management  is  currently  unable to
estimate the amount (if any) of punitive damages that will be paid.

The  insurance  subsidiaries  of  the  Company  are  parties  to  legal  actions
incidental to their business. Based on the advice of counsel,  management of the
Company believes that the resolution of these matters will not materially affect
the Company's financial condition or results of operations.




                                    Page 12

                                       13
<PAGE>

Item 4. Submission of Matters to a Vote of Security Holders

No matters were submitted to a vote of Argonaut  Group's security holders during
the last quarter of its fiscal year ended December 31, 2000.




                                     PART II

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

Market Information

The  Company's  common  stock trades on the NASDAQ Stock Market under the symbol
AGII.  The  information  on high and low common stock prices set forth under the
caption  "Common Stock Market  Prices" in the Annual Report to  Shareholders  of
Argonaut  Group for the fiscal year ended  December  31, 2000,  is  incorporated
herein by reference. See Exhibit Index.

Holders of Common Stock

The number of holders of record of the Company's Common Stock as of February 23,
2001 was 6,501.

Dividends

The  information  set  forth  under the  caption  "Management's  Discussion  and
Analysis of Results of  Operations  and  Financial  Condition  -  Liquidity  and
Capital  Resources" in the Annual Report to  Shareholders  of Argonaut Group for
the fiscal year ended December 31, 2000 and in "Note 6 -  Shareholders'  Equity"
in the Notes to the Consolidated  Financial  Statements of the Annual Report, is
incorporated herein by reference. See Exhibit Index.

Item 6. Selected Financial Data

The  information  set forth under the caption  "Selected  Financial Data" in the
Annual  Report to  Shareholders  of  Argonaut  Group for the  fiscal  year ended
December 31, 2000, is incorporated herein by reference. See Exhibit Index.

Item 7. Management's  Discussion and Analysis of Financial Condition and Results
of Operations
The  information  set  forth  under the  caption  "Management's  Discussion  and
Analysis of Results of Operations and Financial  Condition" in the Annual Report
to  Shareholders  of Argonaut Group for the fiscal year ended December 31, 2000,
is incorporated herein by reference. See Exhibit Index.

                                    Page 13

                                       14
<PAGE>




Item 7A.    Quantitative and Qualitative Disclosures about Market Risk

These  disclosures  are  contained in the section of the MD&A  entitled  "Market
Risk" which is incorporated herein by reference. See Exhibit Index.

Item 8. Financial Statements and Supplementary Data

The  Report  of  Independent  Public  Accountants  and  consolidated   financial
statements and related notes of Argonaut Group, Inc. and subsidiaries  listed on
the index to  financial  statements  set forth in Item  14(a)1 of this Form 10-K
Report are incorporated herein by reference to the Annual Report to Shareholders
of Argonaut Group for the fiscal year ended December 31, 2000.

The Company does not  identify  each asset with any one line of business and any
such allocation would be arbitrary.

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

None.

                                    PART III

Item 10.       Directors and Executive Officers of the Registrant

Incorporated herein by reference is the information appearing under the captions
"Election of Directors",  "Executive Officers," "Security Ownership of Principal
Shareholders and Management" , and Section 16(a) Beneficial  Ownership Reporting
Compliance in the  registrant's  Proxy Statement to be filed with the Securities
and  Exchange   Commission  relating  to  the  registrant's  Annual  Meeting  of
Shareholders to be held on April 24, 2001.


Item 11.       Executive Compensation

Incorporated herein by reference is the information appearing under the captions
"Compensation of Executive Officers",  "Indemnity  Agreements",  "Pension Plan",
and "Compensation of Directors" in the registrant's  Proxy Statement to be filed
with the Securities and Exchange  Commission relating to the registrant's Annual
Meeting of Shareholders to be held on April 24, 2001.

Item 12.       Security Ownership of Certain Beneficial Owners and Management

Incorporated herein by reference is the information  appearing under the caption
"Security   Ownership  of  Principal   Shareholders   and   Management"  in  the
registrant's  Proxy  Statement  to be filed  with the  Securities  and  Exchange
Commission  relating to the  registrant's  Annual Meeting of  Shareholders to be
held on April 24, 2001.

                                     Page 14

                                       15
<PAGE>


Item 13.       Certain Relationships and Related Transactions

Incorporated herein by reference is the information  appearing under the caption
"Compensation and Stock Option Committee  Interlocks and Insider  Participation"
in the registrant's Proxy Statement to be filed with the Securities and Exchange
Commission  relating to the  registrant's  Annual Meeting of  Shareholders to be
held on April 24, 2001.





                                     PART IV

Item 14.       Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a)1.          Financial Statements

               Selected Financial Data

               Report of Independent Public Accountants

               Consolidated Balance Sheets  -  December 31, 2000 and 1999

               Consolidated Statements of Operations
               For the Years Ended December 31, 2000, 1999, and 1998

               Consolidated Statements of  Comprehensive Income
               For the Years Ended December 31, 2000, 1999, and 1998

               Consolidated Statements of Shareholders' Equity
               For the Years Ended December 31, 2000, 1999, and 1998

               Consolidated Statements of Cash Flow
               For the Years Ended December 31, 2000, 1999, and 1998

               Notes to Consolidated Financial Statements

               Quarterly Financial Data (Unaudited)

               Common Stock Market Prices (Unaudited)

               Management's Discussion and Analysis of Results of Operations and
               Financial Condition


                                                  Page 15


                                       16
<PAGE>

(a)2.          Financial Statement Schedules
               Report of Independent Public Accountants on Schedules

               Schedule I - Condensed Financial Information of Registrant
               December 31, 2000 and 1999

               Schedule V - Supplementary Insurance Information December 31,
                2000, 1999, and 1998

All other schedules and notes specified under Regulation S-X are omitted because
they are either not  applicable,  not required,  or the  information  called for
therein  appears  in  response  to the  items of Form  10-K or in the  financial
statements or notes thereto.

(a)3.          Exhibits

The following  exhibits are numbered in  accordance  with Item 601 of Regulation
S-K and, except as noted, are filed herewith.

2.     Information  Statement of  Registrant  (incorporated  by reference to the
       Exhibit  2 to the  Registrant's  Form  10  Registration  Statement  dated
       September 3, 1986,  filed with the Securities and Exchange  Commission on
       September 4, 1986).

  3.1    Certificate of Incorporation  of Registrant  (incorporated by reference
         to the Exhibit 3.1 to the Registrant's  Form 10 Registration  Statement
         dated  September  3,  1986,  filed  with the  Securities  and  Exchange
         Commission on September 4, 1986).

  3.2    Bylaws of the Registrant  (incorporated by reference to the Exhibit 3.2
         to the Registrant's  Form 10 Registration  Statement dated September 3,
         1986, filed with the Securities and Exchange Commission on September 4,
         1986).

10.1     Argonaut Group,  Inc. 1986 Stock Option Plan  (incorporated by
         reference to the Exhibit 10.1 to the Registrant's  Form 10 Registration
         Statement dated September 3, 1986,  filed with the  Securities  and
         Exchange  Commission on September 4, 1986).

10.2     Argonaut Group, Inc.  Retirement Plan (incorporated by reference to the
         Exhibit 10.2 to the Registrant's  Form 10 Registration  Statement dated
         September 3, 1986, filed with the Securities and Exchange Commission on
         September 4, 1986).

10.3     Tax  Agreement  by  and  among  Registrant  and  its  subsidiaries  and
         Teledyne,  Inc.  (incorporated  by reference to the Exhibit 10.3 to the
         Registrant's  Form 10  Registration  Statement dated September 3, 1986,
         filed with the  Securities  and  Exchange  Commission  on  September 4,
         1986).

10.4     Argonaut  Group, Inc. 1986 Stock Option Plan, as amended (incorporated
         by reference to the Exhibit 4.3 to the  Registrant's Registration
         Statement on Form S-8 filed with the Securities and Exchange Commission
         on February 13, 1987).

                                    Page 16

                                       17
<PAGE>

10.5     401(k)  Retirement  Savings Plan  (incorporated by reference to the
         Exhibit 10.4 to the Registrant's  Form 10-K filed with the Securities
         and Exchange Commission on February 28, 1989).

10.6     Employee  Stock  Investment  Plan  (incorporated  by  reference  to the
         Exhibit  4.3 to the  Registrant's  Registration  Statement  on Form S-8
         filed with the Securities and Exchange Commission on October 10, 1989).

10.7     Argonaut  Group,  Inc. 1986 Stock Option Plan, as amended (incorporated
         by reference to the Exhibit 4.3 to the  Registrant's Registration
         Statement on Form S-8 filed with the Securities and Exchange Commission
         on December 9, 1997).

10.8     Argonaut  Group,  Inc. Stock Option Plan, as amended  (incorporated  by
         reference to the Exhibit 4.3 to the Registrant's Registration Statement
         on Form S-8 filed with the Securities and Exchange Commission on August
         27, 1999).

10.9     Employee  Stock  Investment  Plan  (incorporated  by  reference  to the
         Exhibit  4.3 to the  Registrant's  Registration  Statement  on Form S-8
         filed with the Securities and Exchange Commission on October 22, 1999).

13.      The following  materials are excerpted  from the Annual Report to
         Shareholders  of Argonaut  Group,  Inc. for the fiscal year
         ended December 31, 2000:
         a)       Selected Financial Data
         b)       Financial Statements
         c)       Common Stock Market Prices
         d)       Management's Discussion and Analysis of Results of Operations
                  and Financial Condition

21.      Subsidiaries of Registrant (incorporated by reference to the Exhibit 21
         to the Registrant's  Form 10 Registration  Statement dated September 3,
         1986, filed with the Securities and Exchange Commission on September 4,
         1986).

23.      Consent of Independent Public Accountants.

         (b)      Reports on Form 8-K.
                  A report was filed on Form 8-K on January 21, 2000.













                                   Page 17

                                       18
<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.

                                                         ARGONAUT GROUP, INC.

                                                   By  /s/ Mark E. Watson, III
                                            ----------------------------------
                                                           Mark E. Watson, III
                                                           President
 Date:  March 30, 2001

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 on the dates indicated.

Signature                       Title                            Date

/s/ Mark E. Watson, III         President, Chief Executive       March 30, 2001
---------------------------     Officer, and Director
Mark E.Watson, III

/s/ Mark W. Haushill            Vice President, Secretary,       March 30, 2001
---------------------------     and Treasurer (principal
Mark W. Haushill                financial and accounting officer)


/s/ Jerrold V. Jerome            Director                        March 30, 2001
----------------------------
Jerrold V. Jerome

/s/ Michael T. Gray              Director                        March 30, 2001
----------------------------
Michael T. Gray

                                 Director                        March 30, 2001
------------------------
Judith R. Nelson

/s/ George A. Roberts            Director                        March 30, 2001
---------------------------
George A. Roberts

/s/ Fayez S. Sarofim             Director                        March 30, 2001
----------------------------
Fayez S. Sarofim

/s/ John R. Power, Jr.           Director                        March 30, 2001
--------------------------
John R. Power, Jr.

/s/ Gary V. Woods                Director                        March 30, 2001
-------------------------
Gary V. Woods


                                   Page 18


                                       19
<PAGE>



              REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES



To the Shareholders of Argonaut Group, Inc.

We have audited in accordance with auditing standards  generally accepted in the
United States, the consolidated financial statements included in Argonaut Group,
Inc.'s  annual  report to  shareholders  incorporated  by reference in this Form
10-K,  and have issued our report  thereon dated January 29, 2001. Our audit was
made for the purpose of forming an opinion on the basic  consolidated  financial
statements  taken as a whole. The schedules listed in Part IV, Item 14(a)(2) are
the responsibility of the Company's management and are presented for purposes of
complying with the Securities and Exchange  Commission's  rules and are not part
of the  basic  consolidated  financial  statements.  These  schedules  have been
subjected  to the  auditing  procedures  applied  in  our  audit  of  the  basic
consolidated  financial statements and, in our opinion, are fairly stated in all
material  respects in relation to the basic  consolidated  financial  statements
taken as a whole.





ARTHUR ANDERSEN LLP


San Francisco, California
January 29, 2001





<PAGE>                                 20




                                             ARGONAUT GROUP, INC.
                                                     SCHEDULE I
                                 CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                                ($ in millions)

<TABLE>
<CAPTION>

BALANCE SHEET
                                                                        December 31,
                                                               -------------------------------
                                                                        2000            1999
                                                                ---------------  --------------
<S>                                                             <C>             <C>
Assets

      Short-term investments                                          $   0.1         $   1.0
      Cash & cash equivalents
                                                                          0.1             0.2
      Investment in subsidiary
                                                                        493.6           620.7
      Cost in excess of net assets purchased
                                                                         30.0            32.7
      Deferred Federal income taxes
                                                                          5.8             3.3
      Other assets
                                                                         10.3             9.8
                                                               ---------------  --------------

      Total Assets                                                  $   540.8        $  666.8
                                                               ===============  ==============

Liabilities & Shareholders' Equity
      Income taxes payable                                            $   3.6         $   0.8
      Other liabilities
                                                                          3.3             1.6
      Due from/(to) subsidiaries
                                                                         32.8            36.0
      Shareholders' equity
                                                                        501.1           628.4
                                                               ---------------  --------------
      Total Liabilities and Shareholder Equity                       $  540.8        $  666.8
                                                               ===============  ==============
</TABLE>





<TABLE>

STATEMENT OF OPERATIONS                                                For The Year Ended December 31,
                                                               -------------------------------------------------
                                                                    2000            1999             1998
                                                               ---------------  --------------  ---------------
<S>                                                            <C>              <C>             <C>
Revenues                                                              $   3.8         $   3.7          $   4.1

Expenses:
      Amortization of cost in excess of net assets
                                                                          2.8             2.8              2.8
      Other expenses
                                                                          9.5             5.0              5.2
                                                               ---------------  --------------  ---------------
      Total Operating Expenses

Loss Before Tax and Undistributed Earnings
                                                                        (8.5)           (4.1)            (3.9)
Benefit for Income Taxes
                                                                        (4.5)           (0.4)            (4.0)
                                                               ---------------  --------------  ---------------

Net income (loss) before equity in earnings of subsidiary                                                  0.1
                                                                        (4.0)           (3.7)
Equity in undistributed earnings (loss) of subsidiary
                                                                       (79.3)          (11.5)             62.6
                                                               ---------------  --------------  ---------------


Net Income (loss)                                                   $  (83.3)      $   (15.2)         $   62.7
                                                               ===============  ==============  ===============



</TABLE>
                                       21
<PAGE>










                                              ARGONAUT GROUP, INC.
                                                     SCHEDULE I
                                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                                   ($ in millions)

<TABLE>
<CAPTION>
STATEMENT OF CASH FLOWS                                                             For The Year Ended December 31,
                                                                                --------------------------------------------
                                                                                   2000           1999           1998
                                                                                -------------- -------------- --------------
<S>                                                                             <C>            <C>            <C>
Cash flows from operating activities:
      Net income (loss)                                                               $(83.3)    $(15.2)      $62.7

      Adjustments to reconcile net income to net cash provided by operations:
           Amortization                                                                  2.7        2.8         2.8

           Undistributed loss (earnings) in subsidiary                                  79.3       11.5       (62.6)

           Dividend from subsidiary                                                     50.6       66.4        40.5

           Decrease in deferred federal income taxes                                    (2.5)      (0.6)       (5.1)

           Increase (decrease) in due from/to subsidiaries                              (3.2)      13.3        (2.0)

           Increase (decrease) in income taxes payable                                   2.8       (6.2)        3.7

           Other, net                                                                    1.2         .1        (0.2)

                                                                                -------------- -------------- --------------
      Net Cash  Provided (Used ) by Operations                                          47.6       72.1        39.8

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

Cash flows from investing activities:
      Decrease (increase) in short-term investments                                     (0.9)
                                                                                                       10.0          (4.8)
                                                                                -------------- -------------- --------------
Net Cash Provided (Used ) by Investing Activities                                       (0.9)
                                                                                                       10.0          (4.8)
                                                                                -------------- -------------- --------------

Cash flows from financing activities:
      Repurchase of common stock                                                       (10.6)
                                                                                                     (44.1)          (0.5)
      Payment of cash dividend                                                         (36.2)
                                                                                                     (38.9)         (39.3)
      Exercise of stock options                                                            -
                                                                                                       0.8            4.6
                                                                                -------------- -------------- --------------
Net Cash Used by Financing Activities                                                  (46.8)
                                                                                                     (82.2)         (35.2)
                                                                                -------------- -------------- --------------

Increase (decrease) in cash & cash equivalents                                          (0.1)
                                                                                                      (0.1)          (0.2)
Cash & cash equivalents, beginning of period                                             0.2
                                                                                                       0.3            0.5
                                                                                -------------- -------------- --------------
Cash & cash equivalents, end of period                                                 $ 0.1        $  0.2           $0.3

                                                                                ============== ============== ==============

</TABLE>


                                       22
<PAGE>










                                                 ARGONAUT GROUP, INC.
                                                      SCHEDULE V
                                         SUPPLEMENTARY INSURANCE INFORMATION
                                  Years Ended December 31, 2000, 1999, and 1998
                                                   ($ in millions)


<TABLE>
<CAPTION>


                                                                                            Amortization
                                   Future             Other    Premium Net Invt Ben Loss,   (Deferral) Other     Premiums
                         DPAC      Benefits UPR       Payables Revenue Income   & LAE       DPAC     Insur.      Written
       Segment           (a)       (b)      (c)       (d)      (e)     (f) (1)     (g)      (h)     (i) (2)     (j)
-----------------------------------------------------------------------------------------------------------------------

Year Ended December 31, 2000
<S>                    <C>       <C>      <C>       <C>      <C>       <C>       <C>       <C>      <C>       <C>
Workers Comp               $0.4   $ 551.3  $44.8        -      $100.3    $ 31.5   $ 208.5  $ (0.9)    $ 68.9   $ 136.9
 All Other                 (0.2)    379.4   24.9        -        24.3      21.7      39.1    (2.2)      11.1      27.0
 Unallocable                  -         -      -        -           -       8.8         -       -          -         -
                       --------- -------- --------- -------- --------- --------- --------- -------- --------- ---------
                           $0.2    $930.7  $69.7        -      $124.6     $62.0    $247.6   $(3.1)     $80.0   $ 163.9
                       ========= ======== ========= ======== ========= ========= ========= ======== ========= =========
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1999

<S>                    <C>       <C>      <C>       <C>      <C>       <C>       <C>       <C>      <C>       <C>
Workers Comp               $1.4   $474.2   $24.2        -       $65.7    $ 27.6     $92.6   $ (1.6)   $ 52.6      $98.4
All Other                   1.9    423.2    19.7        -        27.3      24.7      28.8      0.1      10.5       23.8
Unallocable                   -        -       -        -           -      16.2         -         -        -          -
                       --------- -------- --------- -------- --------- --------- --------- -------- --------- ---------
                           $3.3   $897.4   $43.9        -       $93.0    $ 68.5    $121.4   $ (1.5)   $ 63.1     $122.2
                       ========= ======== ========= ======== ========= ========= ========= ======== ========= =========
</TABLE>

<TABLE>
<CAPTION>
Year Ended December 31, 1998

<S>                    <C>       <C>      <C>       <C>      <C>       <C>       <C>       <C>      <C>       <C>
Workers Comp                3.0    499.6    17.1        -    $115.6      28.2      75.5      0.3      65.0    $119.2
All Other                   1.8    396.3    19.7        -      22.9      22.3      19.6      0.4      10.6      24.9
Unallocable                   -       -       -         -        -       26.9         -        -         -        -
                       --------- -------- --------- -------- --------- --------- --------- -------- --------- ---------
                            4.8    895.9    36.8        -    $138.5      77.4      95.1      0.7      75.6    $144.1
                       ========= ======== ========= ======== ========= ========= ========= ======== ========= =========
</TABLE>

(a)  Deferred Policy Acquisition Costs
(b)  Future Policy Benefits, Claims, and Claim Adjustment Expenses
(c)  Unearned Premiums
(d)  Other Policy Claims and Benefits Payable
(e)  Premium Revenue
(f)  Net Investment Income
(g)  Benefits, Claims, and Claim Adjustment Expenses
(h)  Amortization of Deferred Policy Acquisition Costs
(i)  Other Insurance Expenses
(j)  Premiums Written


(1)   Net investment income allocated based upon
      each segment's share of investable funds

(2)   Other insurance expenses allocated based
      on specific identification, where possible, and related activities.



                                       23
<PAGE>




                                      EXHIBIT INDEX
Exhibit                                 Document
No.

2.     Information  Statement of  Registrant  (incorporated  by reference to the
       Exhibit  2 to the  Registrant's  Form  10  Registration  Statement  dated
       September 3, 1986,  filed with the Securities and Exchange  Commission on
       September 4, 1986).

  3.1    Certificate of Incorporation  of Registrant  (incorporated by reference
         to the Exhibit 3.1 to the Registrant's  Form 10 Registration  Statement
         dated  September  3,  1986,  filed  with the  Securities  and  Exchange
         Commission on September 4, 1986).

  3.2    Bylaws of the Registrant  (incorporated by reference to the Exhibit 3.2
         to the Registrant's  Form 10 Registration  Statement dated September 3,
         1986, filed with the Securities and Exchange Commission on September 4,
         1986).

10.1     Argonaut Group,  Inc. 1986 Stock Option Plan  (incorporated by
         reference to the Exhibit 10.1 to the Registrant's  Form 10 Registration
         Statement dated September 3, 1986,  filed with the  Securities  and
         Exchange  Commission on September 4, 1986).

10.2     Argonaut Group, Inc.  Retirement Plan (incorporated by reference to the
         Exhibit 10.2 to the Registrant's  Form 10 Registration  Statement dated
         September 3, 1986, filed with the Securities and Exchange Commission on
         September 4, 1986).

10.3     Tax  Agreement  by  and  among  Registrant  and  its  subsidiaries  and
         Teledyne,  Inc.  (incorporated  by reference to the Exhibit 10.3 to the
         Registrant's  Form 10  Registration  Statement dated September 3, 1986,
         filed with the  Securities  and  Exchange  Commission  on  September 4,
         1986).

10.4     Argonaut  Group, Inc. 1986 Stock Option Plan, as amended (incorporated
         by reference to the Exhibit 4.3 to the  Registrant's Registration
         Statement on Form S-8 filed with the Securities and Exchange Commission
         on February 13, 1987).

10.5     401(k)  Retirement  Savings Plan  (incorporated by reference to the
         Exhibit 10.4 to the Registrant's  Form 10-K filed with the Securities
         and Exchange Commission on February 28, 1989).

10.6     Employee  Stock  Investment  Plan  (incorporated  by  reference  to the
         Exhibit  4.3 to the  Registrant's  Registration  Statement  on Form S-8
         filed with the Securities and Exchange Commission on October 10, 1989).

10.7     Argonaut  Group,  Inc. 1986 Stock Option Plan, as amended (incorporated
         by reference to the Exhibit 4.3 to the  Registrant's Registration
         Statement on Form S-8 filed with the Securities and Exchange Commission
         on December 9, 1997).

10.8     Argonaut  Group,  Inc. Stock Option Plan, as amended  (incorporated  by
         reference to the Exhibit 4.3 to the Registrant's Registration Statement
         on Form S-8 filed with the Securities and Exchange Commission on August
         27, 1999).

10.9     Employee  Stock  Investment  Plan  (incorporated  by  reference  to the
         Exhibit  4.3 to the  Registrant's  Registration  Statement  on Form S-8
         filed with the Securities and Exchange Commission on October 22, 1999).

13.      The following  materials are excerpted  from the Annual Report to
         Shareholders  of Argonaut  Group,  Inc. for the fiscal year
         ended December 31, 2000:
         a)       Selected Financial Data
         b)       Financial Statements
         c)       Common Stock Market Prices
         d)       Management's Discussion and Analysis of Results of Operations
                  and Financial Condition

21.      Subsidiaries of Registrant (incorporated by reference to the Exhibit 21
         to the Registrant's  Form 10 Registration  Statement dated September 3,
         1986, filed with the Securities and Exchange Commission on September 4,
         1986).

23.      Consent of Independent Public Accountants.

         (b)      Reports on Form 8-K.
                  A report was filed on Form 8-K on January 21, 2000.