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, 1999
                                      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.)

                              250 Middlefield Road
                        Menlo Park, California 94025-3500
               (Address of principal executive offices) (Zip code)

                                 (650) 858-6600

               (Registrant's telephone number including area code)

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

                               Title of Securities

                    Common Stock, par value of $.10 per share

        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  20,  2000,  registrant  had  22,157,756  shares  of  Common  Stock
outstanding,  and  the  aggregate  market  value  of the  voting  stock  held by
nonaffiliates was approximately $414.1 million.

                       DOCUMENTS INCORPORATED BY REFERENCE
Part II: Excerpts from Argonaut Group,  Inc.'s Annual Report to Shareholders for
the Year Ended December 31, 1999.

Part III: Excerpts from Argonaut Group, Inc.'s
Proxy  Statement for the Annual Meeting of  Shareholders to be held on April 25,
2000.




                                       2
<PAGE>



                              Argonaut Group, Inc.

                           Annual Report on Form 10-K

                      For the Year Ended December 31, 1999

                                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        12

                                     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 Ris  14
Item  8.      Financial Statements and Supplementary Data                15
Item  9.      Changes in and Disagreements with Accountants on           15
                   Accounting and Financial Disclosure

                                    PART III

Item 10.      Directors and Executive Officers of the Registrant         16
Item 11.      Executive Compensation                                     16
Item 12.      Security Ownership of Certain Beneficial Owners
                   and Management                                        16
Item 13.      Certain Relationships and Related Transactions             16

                                    PART IV

Item 14.      Exhibits, Financial Statement Schedules and
              Reports on Form 8-K                                        16
</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  86% of
premiums in 1999 before the  adjustment  to the retro  premium  accrual of $20.0
million.  The information  regarding the retro premium accrual adjustment is 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, 1999,
and is  incorporated  herein  by  reference.  See  Exhibit  Index.  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 250  Middlefield
Road, Menlo Park, California 94025-3500,  telephone 650.858.6600.  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 targets 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  Company  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 10 -  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 $85.7 million
in 1999 (before  adjustment to the retro premium  accrual),  and $115.6 million,
and $140.6 million, in 1998, and 1997, respectively.

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 $27.3  million,  $22.9 million,  and $24.3 million,  in 1999,
1998, and 1997, 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.

As a result  of an  increase  in  prices  in the  reinsurance  market,  Argonaut
Insurance  increased  the  limit of  retention  on its  primary  excess  of loss
reinsurance treaty from $250,000 to $1,000,000 effective July 1, 1999. 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
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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, a leading  insurance  industry  rating and analysis  firm,  as of
December 31, 1998, there are about 2,500  property-casualty  insurance companies
operating  in the United  States,  with the 100  largest  companies  (groups and
unaffiliated)  writing about 80% of the industry's premiums.  Industry wide, net
premiums   earned  totaled   approximately   280  billion  for  1998.   Workers'
Compensation  earned was $25.4  billion or about  9.0% of all  premiums  earned.
(A.M. Best 1999 data is not available yet.)

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,  1999,  calculations  show  that  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  shareholder  dividends  which  can be paid  without  prior  approval  of the
Insurance  Commissioner.  Under  these  provisions,  as of  December  31,  1999,
Argonaut  Insurance  could pay to Argonaut Group a maximum  dividend of $633,000
without the Insurance Commissioner's approval.

                                     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  Company is  authorized  to  operate  in all 50 states.  Its
primary line of business,  workers compensation  insurance,  accounts for 93% of
its total  premiums  (before  adjustment  to the retro premium  accrual).  These
policies are  primarily  written on a  retrospective  rating  basis,  with large
deductible  provisions,  or 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.

Neither  Argonaut  Insurance  nor  Argonaut  Great  Central  market any of their
policies through managing general agents.

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.

Loss ratios for the run off line of business are not  meaningful as there are no
current year  premiums  associated  with the current year losses on this line of
business.

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  1998 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,  1999 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.

During the fourth quarter of 1999, the Company  increased  workers  compensation
loss  reserves  by  $31.7  million,  reflecting  higher  than  anticipated  loss
development  for  accident  years  1998 and 1999,  particularly  in  California.
Preliminary  indications  in the first  quarter of 2000 show  continued  adverse
development  of these  accident  years.  If these  trends  continue,  additional
strengthening of these reserves will be required.

Reserves  for  environmental  claims  were $91.3  million  and $96.3  million at
December 31, 1999 and 1998,  respectively.  Reserves  for  asbestos  claims were
$75.3 and $76.6 million at December 31, 1999 and 1998.

In the opinion of management, the Company's reserves for each of these liability
issues 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   significant
uncertainties  and  related  management  judgments,  however,  there  can  be no
assurance  that  future  loss  development,  favorable  or  unfavorable,  can be
accurately predicted.

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.  The first  table  (Table I)  presented  is net of the  effects of
reinsurance. The second table (Table II) presented includes only amounts related
to direct insurance.

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,
1999.

Conditions  and trends that have affected the  development  of these reserves in
the past will not necessarily  recur in the future.  It would not be appropriate
to use this cumulative history in the projection of future performance.

                                     Page 7


                                       8
<PAGE>
Table I
Analysis of Losses and Loss Adjustment Expenses (LAE) Development (in millions)
                              (Net of Reinsurance)
<TABLE>
<CAPTION>
                        ---------------------------------------------------------------------------------------------------
                           1990       1991      1992       1993       1994       1995     1996     1997     1998    1999
                           ----       ----      ----       ----       ----       ----     ----     ----     ----    ----
<S>                       <C>        <C>       <C>        <C>        <C>        <C>       <C>      <C>      <C>     <C>
Reserves for Losses
and LAE (a)               $1,348.5   $1,287.8  $1,201.9   $1,107.6   $1,011.4    $892.9   $985.8   $845.7   $723.3  $706.5
Cumulative Amount
Paid as of: (b)
One year later               313.1      307.3     276.9      259.9      239.7     214.2    179.0    172.7    149.8
Two years later              537.5      525.8     489.2      444.7      417.9     356.2    309.7    278.7
Three years later            698.5      697.6     638.9      588.8      531.5     468.6    392.7
Four years later             835.7      821.4     759.5      684.1      623.9     537.9
Five years later             940.1      919.5     839.9      758.5      682.9
Six years later            1,021.3      991.0     906.8      814.8
Seven years later          1,082.7    1,051.3     962.7
Eight years later          1,134.2    1,106.0
Nine years later           1,182.6
Reserves Re-estimated
As of:
One year later             1,358.3    1,285.2   1,197.1    1,086.8      996.5   1,073.6    934.0    819.2    785.4
Two years later            1,356.9    1,311.9   1,202.0    1,083.0    1,180.8   1,038.9    895.5    851.1
Three years later          1,381.9    1,315.9   1,203.0    1,283.4    1,159.2   1,014.1    916.0
Four years later           1,374.1    1,325.9   1,403.1    1,277.3    1,152.5   1,033.8
Five years later           1,384.9    1,514.9   1,400.6    1,268.2    1,154.6
Six years later            1,572.0    1,524.3   1,396.2    1,262.2
Seven years later          1,575.6    1,518.8   1,391.3
Eight years later          1,572.8    1,516.7
Nine years later           1,570.9
Cumulative (Deficiency)
Redundancy: (c)           ($222.4)   ($228.9)  ($189.4)   ($154.6)   ($143.2)   ($140.9)   $69.8   ($5.4)  ($62.1)
</TABLE>

(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 cumulative amount paid to unpaid loss and LAE
       and  incurred  but not reported (IBNR) at year end for each accident
       year.

                                     Page 8


                                       9
<PAGE>
Table II
Analysis of Losses and Loss Adjustment Expenses (LAE) Development (in millions)
                             (Direct Insurance Only)
<TABLE>
<CAPTION>
                      ------------------------------------------------------------------------------------------------------
                        1990       1991       1992      1993       1994      1995       1996      1997      1998     1999
                        ----       ----       ----      ----       ----      ----       ----      ----      ----     ----
<S>                    <C>        <C>        <C>       <C>        <C>       <C>        <C>       <C>        <C>      <C>
Reserves for Losses
and LAE (a)            $1,561.8   $1,494.4   $1,390.9  $1,284.1   $1,196.3  $1,060.9   $1,193.7  $1,024.9   $895.9   $897.4
Cumulative Amount
Paid as of: (b)
One year later            384.7      355.7      325.6     288.3      267.5     245.2      234.7     197.0    177.8
Two years later           656.2      621.6      564.4     499.3      474.8     437.8      389.3     329.6
Three years later         862.6      818.2      739.3     668.9      625.4     572.1      498.5
Four years later        1,023.5      965.1      884.2     787.9      737.5     665.5
Five years later        1,149.2    1,086.1      983.5     881.4      817.9
Six years later         1,252.8    1,174.5    1,069.3     951.1
Seven years later       1,327.6    1,253.6    1,134.2
Eight years later       1,396.5    1,314.3
Nine years later        1,450.8
Reserves Re-estimated
as of:
One year later          1,619.3    1,512.6    1,414.2   1,291.7    1,179.7   1,300.3    1,159.7   1,006.2    990.1
Two years later         1,645.8    1,570.2    1,448.8   1,278.8    1,423.1   1,282.8    1,134.3   1,069.7
Three years later       1,702.3    1,603.7    1,440.6   1,533.8    1,404.1   1,267.2    1,182.5
Four years later        1,719.7    1,604.2    1,694.5   1,526.6    1,412.1   1,317.3
Five years later        1,723.6    1,841.5    1,687.5   1,532.5    1,440.9
Six years later         1,956.8    1,850.4    1,698.0   1,546.4
Seven years later       1,958.8    1,859.5    1,708.6
Eight years later       1,970.0    1,869.4
Nine years later        1,980.8
Cumulative (Deficiency)
Redundancy: (c)        ($419.0)   ($375.0)   ($317.7)  ($262.3)   ($244.6)  ($256.4)      $11.2    ($44.8)  ($94.2)
</TABLE>

(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.

                                     Page 9


                                       10
<PAGE>
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).
<TABLE>
<CAPTION>

                                     Year Ended December 31,
                                    ------------------------
                                    1999      1998      1997
                                    -----     -----     -----
<S>                                 <C>       <C>       <C>
Ratio of:
Premium-to-surplus                   0.2      0.2       0.3
                                     ===      ===       ===
Reserves-to-surplus                  1.2      1.1       1.5
                                     ===      ===       ===
</TABLE>

The Company believes that its 1999 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  has carried an "A+"  (Superior)  rating
since  1991.  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 "AA-" and Argonaut  Great Central as
"A".

Employees

At December 31, 1999,  the Company  employed 372  full-time  employees.  Of this
total, Argonaut Insurance employed 288 people (251  professional/managerial  and
37  clerical/operational).   Argonaut  Great  Central  employed  70  people  (44
professional/managerial and 26 clerical/operational). Argonaut Group employed 14
people (13 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, 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.

Argonaut Insurance responded to the complaint, and brought certain counterclaims
against the MTA, and possibly  others,  in connection with the facts  underlying
the  lawsuit.  Argonaut  Insurance  believes it has  meritorious  defenses,  and
intends to vigorously contest these claims.  Argonaut Insurance 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 investigation conducted thus far.

The Company has been sued in fifteen 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; El Chico  Restaurants,
Inc. v. The Aetna  Casualty and Surety  Company,  et al.; Civil Action File No.
97-RCCV-28,  pending in the Superior Court of Richmond County,  Georgia,  filed
on January 10, 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.; 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,






                                     Page 11


                                       12
<PAGE>
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;  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; FFE
Transportation  Services,  Inc., et al. v. NCCI, et al., Case No.  98-RCCV-509;
Superior Court of Richmond County, State of Georgia, was filed on June 11, 1998;
Payless Cashways, Inc., et al. v. National Surety Corp.,  et al., Case No.
9812388;  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. Management is unable to
determine the potential financial impact of these lawsuits at this time.

The  insurance  subsidiaries  of the Company are parties to other  various legal
proceedings  which are  considered  routine and incidental to their business and
are not material to the Company's financial condition or results of operations.

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, 1999.

                                     Page 12


                                       13
<PAGE>
                                    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 closing price on March 20, 2000 was $18.69 per share.  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, 1999, 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 25,
2000 was 6,985.

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, 1999 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, 1999, 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, 1999,
is incorporated herein by reference. See Exhibit Index.

YEAR 2000.  The  Company is pleased to report  that it has not  experienced  any
significant  systems  or  other  Year  2000  (Y2K)  problems  at the turn of the
millennium.  During the first hours of  January,  2000,  the systems  department
successfully  completed  a turn  of  century  date  check  out  of all  systems,
applications,  connections,  hardware and software.  All systems continued to be
functional and there were no crisis shutdowns.

                                     Page 13


                                       14
<PAGE>
As of the business week  starting  January 3, 2000 all systems were and continue
to be monitored for any Y2K exceptions. The Company has implemented an extensive
Year 2000 contingency plan that identifies  pre-planned courses of action in the
event  that Y2K  problems  interrupt  its  internal  processes  or its  business
partners'  processes.  As of mid-1999 all third party  vendors and customers had
declared themselves to the Company to be Y2K compliant. As a result there are no
third  parties that are currently  unable to transact  business with the Company
due to Y2K systems  problems.  The  contingency  plan will continue  through the
quarter end of March 2000.

There has been no material  change in total project cost for  upgrading  systems
for Y2K compliance from the approximately $4.4 million previously disclosed. All
costs  associated  with  the  project  have  been  expensed  as  incurred.   The
postponement of known systems projects or other capital spending does not appear
to have any  material  impact on the  company's  liquidity  as the result of the
devotion of company resources to preparing for Y2K compliance.

In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial  Accounting  Standard ("SFAS") No. 133,  "Accounting for Derivative
Instruments and Hedging  Activities." SFAS No. 133 requires  companies to record
derivatives  on the  balance  sheet as assets or  liabilities,  measured at fair
value. Gains or losses resulting from changes in the values of those derivatives
would be accounted  for  depending on the use of the  derivative  and whether it
qualifies for hedge  accounting.  The key criterion for hedge accounting is that
the  hedging  relationship  must be highly  effective  in  achieving  offsetting
changes in fair value or cash flows.  SFAS No. 133 is effective for fiscal years
beginning  after June 15,  1999.  In May 1999,  the FASB  issued  SFAS No.  137,
"Accounting for Derivative  Instruments and Hedging Activities - Deferral of the
Effective  Date of SFAS No.  133",  that  amends  SFAS No.  133 and  defers  the
effective date to fiscal years beginning after June 15, 2000.  Management of the
Company  does not  believe  the  adoption  of SFAS No.  133 will have a material
impact on the  Company's  results  of  operations  or  financial  position  when
adopted.

Item 7A.    Quantitative and Qualitative Disclosures about Market Risk

The primary  market  risk  exposures  that result in an impact to the  Company's
investment  portfolio relates to equity price changes and interest rate changes.
The  Company  does  not have  any  foreign  currency  risk,  debt or  derivative
instruments.

The Company holds a well  diversified  portfolio of  investments in common stock
representing  U.S.  firms in industries and market  segments  ranging from small
market  capitalization  stocks to the Standard & Poors 500 stocks.  Equity price
risk is managed primarily through the daily monitoring of funds committed to the
various  types  securities  owned by the Company and by limiting the exposure in
any one investment or type of  investment.  At December 31, 1999 the fair market
value of the Company's  common stock was $427.1  million.  The potential loss in
fair value at December 31, 1999 using a 10% hypothetical  decline in prices,  is
estimated to be approximately $42.7 million.

The  Company's  primary  exposure  to  interest  rate risk  relates to its fixed
maturity  investments  including  redeemable  preferred stock. Changes in market
interest rates directly impact the market value of the fixed maturity securities
and preferred stocks. The following interest rate sensitivity  analysis measures
the potential change in fair value for the Company's fixed maturity  investments
and preferred  stock as of December 31, 1999  resulting from changes in the rate
of 100 and 200 basis points.

                                     Page 14


                                       15
<PAGE>

Interest Rate Sensitivity Analysis

                                                      Yield         Modified
                                         Fair Value    To           Duration
                                         (Millions)    Maturity      (Years)
                                           -----         ----          ---
-200bp                                     867.3         5.5%          6.4
-100bp                                     871.8         6.1%          6.3
Base Case                                  806.7         7.1%          6.1
+100bp                                     761.3         8.1%          5.7
+200bp                                     717.1         9.1%          5.5

Argonaut  adheres  to  certain  specific  guidelines  to manage  its  investment
portfolio.  The Company invests only in high investment grade bonds ("AAA" rated
U.S.  treasury  notes and  government  agencies and "A" or better for  municipal
bonds and preferred  stocks) with a short horizon (10 year maximum) for treasury
notes, municipal bonds, and government agencies.

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, 1999.

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.















                                     Page 15


                                       16
<PAGE>


                                    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 25, 2000.

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 25, 2000.

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 25, 2000.

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 25, 2000.

                                     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, 1999 and 1998



                                     Page 16


                                       17
<PAGE>

               Consolidated Statements of Operations
               For the Years Ended December 31, 1999, 1998, and 1997

               Consolidated Statements of  Comprehensive Income
               For the Years Ended December 31, 1999, 1998, and 1997

               Consolidated Statements of Shareholders' Equity
               For the Years Ended December 31, 1999, 1998, and 1997

               Consolidated Statements of Cash Flow
               For the Years Ended December 31, 1999, 1998, and 1997

               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

(a)2.          Financial Statement Schedules

               Report of Independent Public Accountants on Schedules

               Schedule I - Condensed Financial Information of Registrant
               December 31, 1999 and 1998

               Schedule V - Supplementary Insurance Information December 31,
               1999, 1998, and 1997

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).

                                     Page 17


                                       18
<PAGE>


  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).

                                     Page 18


                                       19
<PAGE>

13.      The following  materials are excerpted  from the Annual Report to
         Shareholders  of Argonaut  Group,  Inc. for the fiscal year ended
         December 31, 1999:
         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.

27.      Financial Data Schedule for December 31, 1999 Form 10-K.

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

                                     Page 19


                                       20
<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 21, 2000

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 21, 2000
-----------------------            Officer, and Director
Mark E.Watson, III

/s/ James B Halliday               Vice President, Secretary,   March 21, 2000
-----------------------            and Treasurer (principal
James B Halliday                   financial and accounting
                                   officer)


/s/ George A. Roberts              Director                     March 21, 2000
-----------------------
George A. Roberts

/s/ Michael T. Gray                Director                     March 21, 2000
-----------------------
Michael T. Gray

/s/ Jerrold V. Jerome              Director                     March 21, 2000
-----------------------
Jerrold V. Jerome

/s/ Judith R. Nelson               Director                     March 21, 2000
-----------------------
Judith R. Nelson

/s/ John R. Power, Jr.             Director                     March 21, 2000
-----------------------
John R. Power, Jr.

                                         Page 20


                                       21
<PAGE>

              REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS ON SCHEDULES

To the Shareholders of Argonaut Group, Inc.

We have audited in accordance with generally  accepted auditing  standards,  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 21, 2000.  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 21, 2000


                                       22
<PAGE>

                              ARGONAUT GROUP, INC.
                                   SCHEDULE I
                  CONDENSED FINANCIAL INFORMATION OF REGISTRANT
                                 ($ in millions)
<TABLE>
<CAPTION>
BALANCE SHEET
                                                                        December 31,
                                                                       -----------------
Assets                                                                   1999      1998
                                                                       ------    -------
<S>                                                                   <C>       <C>
      Short-term investments                                          $   0.1   $   10.1
      Cash & cash equivalents                                             0.2        0.3
      Investment in subsidiary                                          546.1      661.1
      Cost in excess of net assets purchased                             32.7       35.5
      Deferred Federal income taxes receivable                           77.9       68.8
      Other assets                                                        9.8        9.3
                                                                       ------     ------
                                                                      $ 666.8   $  785.1
                                                                       ======     ======
Liabilities & Shareholders' Equity
      Income taxes payable                                            $   0.8   $    7.0
      Other liabilities                                                   1.6        1.0
      Due from/(to) subsidiaries                                         36.0       22.7
      Shareholders' equity                                              628.4      754.4

                                                                       ------     ------
                                                                      $ 666.8   $  785.1
                                                                       ======     ======
</TABLE>




<TABLE>
<CAPTION>
STATEMENT OF OPERATIONS                                                For The Year Ended December 31,
                                                               -------------------------------------------------
                                                                    1999            1998             1997
                                                               ---------------  --------------  ---------------
<S>                                                                     <C>             <C>              <C>
Revenues                                                                $ 3.7           $ 4.1            $ 5.3

Expenses:
      Amortization of cost in excess of net assets                        2.8             2.8              2.8
      Other expenses                                                      5.0             5.2              4.0

Loss before tax and undistributed earnings                               (4.1)           (3.9)            (1.5)
Provision for income taxes                                               (8.8)           21.9             12.5
                                                               ---------------  --------------  ---------------
Net loss before equity in earnings of subsidiary                          4.7           (25.8)           (14.0)
Equity (loss) in undistributed earnings of subsidiary                   (10.7)           64.8             50.5
                                                               ---------------  --------------  ---------------
Net Income (loss)                                                       $(6.0)          $39.0            $36.5
                                                               ===============  ==============  ===============
</TABLE>



                                       23
<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,
                                                                               --------------------------------------------
                                                                                   1999           1998           1997
                                                                               -------------- -------------- --------------
<S>                                                                            <C>            <C>            <C>
Cash flows from operating activities:

      Net income (loss)                                                        $ (6.0)        $  39.0        $  36.5
      Adjustments to reconcile net income to
           net cash provided by operations:
           Amortization                                                           2.8             2.8            2.8
           Undistributed loss (earnings) in subsidiary                           10.7           (64.8)         (50.5)
           Dividend from subsidiary                                              66.4            40.5           38.3
           Decrease in deferred federal income taxes
               (payable) receivable                                              (9.0)           20.8           13.1
           Increase (decrease) in due from/to subsidiaries                       13.3            (2.0)          (2.5)
           Increase (decrease) in income taxes payable                           (6.2)            3.7            2.1
           Other, net                                                             0.1            (0.2)          (0.4)
                                                                               -------------- -------------- --------------
                                                                                 72.1            39.8           39.4
                                                                               -------------- -------------- --------------
Cash flows from investing activities:
      Decrease (increase) in short-term investments                              10.0            (4.8)          (2.2)
                                                                               -------------- -------------- --------------
                                                                                 10.0            (4.8)          (2.2)
                                                                               -------------- -------------- --------------

Cash flows from financing activities:
      Repurchase of common stock                                                (44.1)           (0.5)            -
      Payment of cash dividend                                                  (38.9)          (39.3)         (38.1)
      Exercise of stock options                                                   0.8             4.6            1.2
                                                                               -------------- -------------- --------------

                                                                                (82.2)          (35.2)         (36.9)
                                                                               -------------- -------------- --------------
Increase (decrease) in cash & cash equivalents                                   (0.1)           (0.2)           0.3
Cash & cash equivalents, beginning of period                                      0.3             0.5            0.2
                                                                               -------------- -------------- --------------
Cash & cash equivalents, end of period                                           $0.2            $0.3           $0.5
                                                                               ============== ============== ==============
</TABLE>









                                       24
<PAGE>


                              ARGONAUT GROUP, INC.
                                   SCHEDULE V
                       SUPPLEMENTARY INSURANCE INFORMATION
                  Years Ended December 31, 1999, 1998, and 1997
                                 ($ in millions)
<TABLE>
<CAPTION>

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

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

Year Ended December 31, 1998
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
                       ========= ======== ========= ================== ========= ================== ========= =========

Year Ended December 31, 1997
Workers Comp              $ 2.7  $  572.4  $ 20.8      -      $140.6    $ 36.5   $91.1    $(1.3)     $72.2    $132.3
All Other                   1.3     452.5    19.4      -        24.3      28.8    21.7      0.1        7.2      25.9
Unallocable                  -         -       -       -        -         21.9     -        -           -        -
                       --------- -------- --------- ------------------ --------- ------------------ --------- ---------
                          $ 4.0  $1,024.9  $ 40.2      -       $164.9    $87.2   $112.8   $(1.2)    $ 79.4    $158.2
                       ========= ======== ========= ================== ========= ================== ========= =========
</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 uponeachsegment's share of
     investable funds
(2)  Other insurance expenses allocated basedon specific identification,
     where possible,and related activities.


                                       25
<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   Registra-
         tion 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, 1999:
         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.

27.      Financial Data Schedule for December 31, 1999 Form 10-K.

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