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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



FORM 10-Q



(Mark One)



þ     QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934.



For the Quarterly period ended September 30, 2003.



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
000-28249



AMERINST INSURANCE GROUP, LTD.

---

(Exact name of registrant as specified in its charter)



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





|C/O USA Risk Group (Bermuda) Ltd., Windsor Place, 18 Queen Street, 2ndFloor, |  |           
|---------------------------------------------------------------------------- |  | ----------
|PO Box HM 1601, Hamilton , Bermuda                                           |  | HM GX     
|                                                                            
|(Address of Principal Executive Offices)                                     |  | (Zip Code)



(441) 296-3973

---

(Registrants telephone number, including area code )







---

(Former name, former address and former fiscal year, if changed since last report)



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  þ        NO ̈



Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act).

YES ̈NO  þ



As of October 31, 2003 there were 302,134 shares of the registrants
common shares, $1.00 par value per share, outstanding.



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AMERINST INSURANCE GROUP, LTD.



Quarterly Report on Form 10-Q

For the quarter ended September 30, 2003

TABLE OF CONTENTS



|                                                                                              |  | Page
|--------------------------------------------------------------------------------------------- |  | ----
|PART 1FINANCIAL INFORMATION                                                                  |  |     
|                                                                                              | 
|Item 1. Financial Statements                                                                  |  | 1   
|Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations |  | 4   
|Item 3. Quantitative and Qualitative Disclosures About Market Risk                            |  | 7   
|Item 4. Controls and Procedures                                                               |  | 9   
|                                                                                              | 
|PART IIOTHER INFORMATION                                                                     |  |     
|                                                                                              | 
|Item 1. Legal Proceedings                                                                     |  | 9   
|Item 2. Changes in Securities and Use of Proceeds                                             |  | 9   
|Item 3. Defaults Upon Senior Securities                                                       |  | 9   
|Item 4. Submission of Matters to a Vote of Security Holders                                   |  | 9   
|Item 5. Other Information                                                                     |  | 9   
|Item 6. Exhibits and Reports on Form 8-K                                                      |  | 9   
|                                                                                              | 
|Signatures                                                                                    |  | 10  



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Part IFINANCIAL INFORMATION



Item 1. Financial Statements



AMERINST INSURANCE GROUP, LTD.



CONDENSED
CONSOLIDATED BALANCE SHEETS

(Unaudited)



|                                                                                                     |  | As ofSeptember 30,2003 |            |   | As ofDecember 31,2002 |  
|---------------------------------------------------------------------------------------------------- |  | ---------------------- | ---------- | - | --------------------- | -
|ASSETS                                                                                               |  |                        |            |   |                       |  
|INVESTMENTS                                                                                          |  |                        |            |   |                       |  
|Fixed maturity investments, at market value                                                          |  | $                      | 32,189,489 |   |                       | $
|Equity securities, at market value                                                                   |  |                        | 17,112,970 |   |                       |  
|                                                                                                     |  |                        |            |   |                       |  
|TOTAL INVESTMENTS                                                                                    |  |                        | 49,302,459 |   |                       |  
|Cash and cash equivalents                                                                            |  |                        | 2,785,574  |   |                       |  
|Assumed reinsurance premiums receivable                                                              |  |                        | 859,919    |   |                       |  
|Reinsurance balances recoverable                                                                     |  |                        | 674,223    |   |                       |  
|Fund deposit with a reinsurer                                                                        |  |                        |           |   |                       |  
|Accrued investment income                                                                            |  |                        | 323,586    |   |                       |  
|Deferred policy acquisition costs                                                                    |  |                        | 974,547    |   |                       |  
|Prepaid expenses and other assets                                                                    |  |                        | 109,292    |   |                       |  
|                                                                                                     |  |                        |            |   |                       |  
|TOTAL ASSETS                                                                                         |  | $                      | 55,029,600 |   |                       | $
|                                                                                                     |  |                        |            |   |                       |  
|LIABILITIES AND STOCKHOLDERS EQUITY                                                                 |  |                        |            |   |                       |  
|LIABILITIES                                                                                          |  |                        |            |   |                       |  
|Unpaid losses and loss adjustment expenses                                                           |  | $                      | 33,221,637 |   |                       | $
|Unearned premiums                                                                                    |  |                        | 3,620,684  |   |                       |  
|Accrued expenses and other liabilities                                                               |  |                        | 494,792    |   |                       |  
|TOTAL LIABILITIES                                                                                    |  |                        | 37,337,113 |   |                       |  
|                                                                                                     |  |                        |            |   |                       |  
|                                                                                                     |  |                       
|STOCKHOLDERS EQUITY                                                                                 |  |                        |            |   |                       |  
|Common shares, $1 par value, 500,000 shares authorized,2003 and 2002: 331,751 issued and outstanding |  |                        | 331,751    |   |                       |  
|Additional paid-in capital                                                                           |  |                        | 6,801,870  |   |                       |  
|Retained earnings                                                                                    |  |                        | 7,220,344  |   |                       |  
|Accumulated other comprehensive income                                                               |  |                        | 4,426,505  |   |                       |  
|Treasury Stock (29,252 and 25,615 shares) at cost                                                    |  |                        | (1,087,983 | ) |                       |  
|                                                                                                     |  |                        |            |   |                       |  
|TOTAL STOCKHOLDERS EQUITY                                                                           |  |                        | 17,692,487 |   |                       |  
|                                                                                                     |  |                        |            |   |                       |  
|TOTAL LIABILITIES AND STOCKHOLDERS EQUITY                                                           |  | $                      | 55,029,600 |   |                       | $
|                                                                                                     |  |                        |            |   |                       |  



See the accompany notes
to the condensed consolidated financial statements.



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AMERINST INSURANCE GROUP, LTD.



CONDENSED CONSOLIDATED STATEMENTS OF

OPERATIONS, COMPREHENSIVE INCOME

AND RETAINED EARNINGS

(Unaudited)



|                                                                               |  | Nine MonthsEnded Sep 30, 2003 |           |   | Nine MonthsEnded Sep 30, 2002 |   |            | Three MonthsEnded Sep 30, 2003 |  |   | Three MonthsEnded Sep 30, 2002 |  
|------------------------------------------------------------------------------ |  | ----------------------------- | --------- | - | ----------------------------- | - | ---------- | ------------------------------ |  | - | ------------------------------ | -
|REVENUE                                                                        |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Net premiums earned                                                            |  | $                             | 6,301,710 |   |                               | $ | 4,680,080  |                                |  | $ | 2,344,673                      |  
|Net investment income                                                          |  |                               | 1,212,072 |   |                               |   | 1,533,858  |                                |  |   | 391,667                        |  
|Net realized capital gain (loss)                                               |  |                               | 366,590   |   |                               |   | 752,808    |                                |  |   | 73,432                         |  
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Total revenue                                                                  |  |                               | 7,880,372 |   |                               |   | 6,966,746  |                                |  |   | 2,809,772                      |  
|LOSSES AND EXPENSES                                                            |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Losses and loss adjustment expense                                             |  |                               | 5,649,068 |   |                               |   | 4,212,236  |                                |  |   | 2,096,502                      |  
|Policy acquisition costs                                                       |  |                               | 1,830,755 |   |                               |   | 1,381,868  |                                |  |   | 676,828                        |  
|Operating and management expenses                                              |  |                               | 789,852   |   |                               |   | 661,300    |                                |  |   | 182,630                        |  
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Total losses and expenses                                                      |  |                               | 8,269,675 |   |                               |   | 6,255,404  |                                |  |   | 2,955,960                      |  
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|NET INCOME (LOSS)                                                              |  | $                             | (389,303  | ) |                               | $ | 711,342    |                                |  | $ | (146,188                       | )
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|OTHER COMPREHENSIVE INCOME (LOSS)                                              |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Net unrealized holding gains (losses) arising during the period                |  |                               | 1,462,835 |   |                               |   | (2,508,683 | )                              |  |   | (706,319                       | )
|Reclassification adjustment for gains and losses included in net income (loss) |  |                               | (366,590  | ) |                               |   | (752,808   | )                              |  |   | (73,432                        | )
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|OTHER COMPREHENSIVE INCOME (LOSS)                                              |  |                               | 1,096,245 |   |                               |   | (3,261,491 | )                              |  |   | (779,751                       | )
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|COMPREHENSIVE INCOME (LOSS)                                                    |  | $                             | 706,942   |   |                               | $ | (2,550,149 | )                              |  | $ | (925,939                       | )
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|RETAINED EARNINGS, BEGINNING OF PERIOD                                         |  | $                             | 8,202,991 |   |                               | $ | 9,747,981  |                                |  | $ | 7,563,785                      |  
|Net income (loss)                                                              |  |                               | (389,303  | ) |                               |   | 711,342    |                                |  |   | (146,188                       | )
|Dividends paid                                                                 |  |                               | (593,344  | ) |                               |   | (603,889   | )                              |  |   | (197,253                       | )
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|RETAINED EARNINGS, END OF PERIOD                                               |  | $                             | 7,220,344 |   |                               | $ | 9,855,434  |                                |  | $ | 7,220,344                      |  
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Per share amounts                                                              |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Net income (loss)                                                              |  | $                             | (1.28     | ) |                               | $ | 2.30       |                                |  | $ | (0.48                          | )
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Dividends paid                                                                 |  | $                             | 1.95      |   |                               | $ | 1.95       |                                |  | $ | 0.65                           |  
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  
|Weighted average number of shares outstanding for the entire period            |  |                               | 304,318   |   |                               |   | 309,577    |                                |  |   | 303,472                        |  
|                                                                               |  |                               |           |   |                               |   |            |                                |  |   |                                |  



See the accompanying
notes to the condensed consolidated financial statements.



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AMERINST INSURANCE GROUP, LTD.



CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)



|                                                    |  | Nine MonthsEnded Sep 30, 2003 |             |   | Nine MonthsEnded Sep 30, 2002 |  
|--------------------------------------------------- |  | ----------------------------- | ----------- | - | ----------------------------- | -
|OPERATING ACTIVITIES                                |  |                               |             |   |                               |  
|Net Cash Provided by Operating Activities           |  | $                             | 1,973,327   |   |                               | $
|                                                    |  |                               |             |   |                               |  
|                                                    |  |                              
|INVESTING ACTIVITIES                                |  |                               |             |   |                               |  
|Purchases of investments                            |  |                               | (25,108,231 | ) |                               |  
|Proceeds from sales and maturities of investments   |  |                               | 23,492,124  |   |                               |  
|                                                    |  |                               |             |   |                               |  
|Net Cash Provided by (Used in) Investing Activities |  |                               | (1,616,107  | ) |                               |  
|                                                    |  |                               |             |   |                               |  
|                                                    |  |                              
|FINANCING ACTIVITIES                                |  |                               |             |   |                               |  
|Purchase of treasury shares                         |  |                               | (137,847    | ) |                               |  
|Dividends paid                                      |  |                               | (593,344    | ) |                               |  
|                                                    |  |                               |             |   |                               |  
|Net Cash Used in Financing Activities               |  |                               | (731,191    | ) |                               |  
|                                                    |  |                               |             |   |                               |  
|                                                    |  |                              
|DECREASE IN CASH AND CASH EQUIVALENTS               |  | $                             | (373,971    | ) |                               | $
|CASH AND CASH EQUIVALENTS BEGINNING OF PERIOD       |  | $                             | 3,159,545   |   |                               | $
|                                                    |  |                               |             |   |                               |  
|CASH AND CASH EQUIVALENTS END OF PERIOD             |  | $                             | 2,785,574   |   |                               | $
|                                                    |  |                               |             |   |                               |  



See the accompany notes
to the condensed consolidated financial statements.



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AMERINST INSURANCE GROUP, LTD.



NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)

September 30, 2003



Basis of Presentation



The condensed consolidated financial statements included herein have been prepared by AmerInst Insurance Group, Ltd. (AmerInst) without audit,
pursuant to the rules and regulations of the Securities and Exchange Commission and reflect all adjustments consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of the results of
operations for the periods shown. These statements are condensed and do not incorporate all the information required under generally accepted accounting principles to be included in a full set of financial statements. It is suggested that these
condensed statements be read in conjunction with the consolidated financial statements at and for the year ended December 31, 2002 and notes thereto, included in AmerInsts annual report as of that date.





Part I, Item
2





MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF

OPERATIONS



OPERATIONS



Three months ended September 30, 2003 compared to three months ended September 30, 2002:



We recorded a net loss of $(146,188) for the third quarter of 2003 compared
to a net loss of $(17,872) for the same period of 2002. This decline was due to a decrease in our net investment income of $208,111 and an increase in our recorded losses and policy acquisition costs of $1,115,711, resulting from an increase in net
premiums earned of $962,061, offset by an improvement of our net realized capital gain of $202,492 and a decline of our operating and management expenses of $30,953. Our earned premiums for the third quarter of 2003 were $2,344,673 compared to
$1,382,612 for the third quarter of 2002, an increase of 69.6%. Net premiums written for the three months ended September 30, 2003 were $2,683,275, compared to $1,922,290 for the third quarter of 2002, an increase of $760,985 or 39.6%. $224,820 of
this increase consisted of premiums related to the new treaty to reinsure attorneys professional liability business, approved on February 27, 2003 by our Board of Directors.



Our loss ratio for the third quarter of 2003 was 89.4%, compared to 90.0% for the same period of 2002. The loss ratio
represents our managements current estimate of the effective loss rate selected in consultation with our independent consulting actuary. We multiply a loss ratio of 90% times the AICPA Professional Liability Insurance Plan current premiums
earned and a loss ratio of 75% times the attorneys professional liability plan current premiums earned to determine total losses. This is a change in the current period due to the addition of the attorneys professional liability plan. In
the same period of 2002, we multiplied a loss ratio of 90% times the AICPA Professional Liability Insurance Plan current premiums earned. Our overall loss ratio for the year ended December 31, 2002 was 89.2%.



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AMERINST INSURANCE GROUP, LTD.



OPERATIONS(Continued)



We expensed policy acquisition costs of $676,828 in the third quarter of 2003 compared to $413,268 for the same period of 2002, an increase of $263,560 or
63.8%. These costs were 28.9% and 29.9% of net premiums earned for the quarters ended September 30, 2003 and 2002, respectively. Policy acquisition costs are the sum of ceding commissions paid to ceding companies determined contractually pursuant to
reinsurance agreements and federal excise taxes paid on premiums written to ceding companies.



We expensed operating and management expenses of $182,630 in the third quarter of 2003 compared to $213,583 for the same period of 2002, a decrease of $50,593 or 14.5%. The decrease was primarily due to consulting
fees expensed in the third quarter of 2002 relating to market research for the expansion of our reinsurance activities that were not incurred in the same period of 2003.



These fluctuations in premiums, losses and policy acquisition costs resulted in a net underwriting loss (net premiums earned
less the sum of loss and loss adjustment expenses and policy acquisition costs) of $(428,657) for the third quarter of 2003 compared to $(275,007) for the same period of 2002, an increase of $153,650 or 55.9%. The increase was primarily due to
increased recorded losses and policy acquisition costs resulting from the increase in the net premiums earned.



We recorded net investment income of $391,677 in the third quarter of 2003 compared to $599,778 for the same period of 2002, a decrease of $208,101 or
34.7%. The decrease was primarily due to a decline in the interest rates on the fixed income portfolio and cash and cash equivalents and the dividends paid on the equity securities for the third quarter compared to the same period of 2002.
Annualized investment yield, calculated as the net average amount of total investments divided by interest and dividend income, annualized, was 3.0% for the third quarter of 2003. This was a decrease from the 4.8% yield earned in the third quarter
of 2002. Sales of securities during the second quarter of 2003 resulted in realized capital gains of $73,432, compared to losses of $(129,060) in the third quarter of 2002. Gains recorded in the third quarter of 2003 primarily related to sales of
equity securities. Proceeds of these sales were subsequently reinvested in other equity securities.



Nine months ended September 30, 2003 compared to nine months ended September 30, 2002:



We recorded net loss of $(389,303) for the nine months ended September 30, 2003 compared to net income of $711,342 for the nine months ended September 30,
2002. This decrease was due to a decrease of net investment income of $321,786 and net realized capital gain of $386,218, an increase in our recorded losses and policy acquisition costs of $1,885,719, resulting from an increase in our net premiums
earned of $1,621,630, and an increase of operating and management expenses of $128,552.



We recorded net investment income of $1,212,072 for the nine months ended September 30, 2003 compared to net investment income of $1,533,858 for the nine months ended September 30, 2002, a decrease of 20.9%. This
decrease was primarily due to a decline in the interest rates on the fixed income portfolio and cash and cash equivalents and the dividends paid on the equity securities for the nine months ended September 30, 2003 compared to the same period of
2002. We realized capital gains of $366,590 during the nine months ended September 30, 2003 compared to $752,808 in capital gains in the same period of 2002. Gains recorded in 2003 primarily related to sales of equity securities. Proceeds of these
sales were reinvested in other equity securities. Annualized investment yield for the nine months period ended September 30, 2003 was approximately 3.2% compared to 4.3% for the first nine months of 2002.



Our net premiums earned for the first nine months of 2003 were $6,301,710
compared to $4,680,080 for 2002 or a 34.6% increase. The increase in net premiums earned was primarily attributable to an increase in the number of insureds and rate increases under the current AICPA Professional Liability Plan treaty compared to
the same period in 2002. Premiums written in the nine months ended September 30, 2003 were $6,572,013 compared to $4,804,372 for the same period in 2002. A portion of the $1,767,641 or 36.8% increase was due to $477,301 in premiums written for the
attorneys professional liability business in the nine months ended September 30, 2003. The balance of our increased premiums written is primarily due to an increase in the number of insureds under the AICPA Plan, and rate increases for
policies issued under the AICPA Plan.



The loss ratio through
the first nine months of 2003 was 89.6% compared to 90.0% for the same period of 2002. The loss ratio represents our managements estimate of the effective loss rate selected in consultation with our independent consulting actuary. We multiply
a loss ratio of 90% times the AICPA Professional Liability Insurance Plan current premiums earned and a loss ratio of 75% times the attorneys professional liability plan current premiums earned to determine total losses.



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Table of Contents



AMERINST INSURANCE GROUP, LTD.



OPERATIONS  (Continued)



We expensed policy acquisition costs of $1,830,755 in the first nine months of 2003 compared to $1,381,868 for the same period of 2002, an increase of
$448,887 or 32.5%. These costs were 29.1% and 29.5% of net premiums earned for the nine-month periods ended September 30, 2003 and 2002, respectively.



We expensed operating and management expenses of $789,852 in the first nine months of 2003 compared to $661,300 for the same period of 2002, an increase
of 19.4%. The increase was primarily due to additional consulting fees that were expensed during 2003 compared to the same period of 2002.



These fluctuations resulted in a net underwriting loss (net premiums earned less the sum of loss and loss adjustment expenses and policy acquisition
costs) of $(1,178,113) for the nine month period compared to $(914,024) for the same period in 2002, an increase of $264,089 or 28.9%. The less favorable underwriting results in 2003 were primarily due to the increase of losses incurred and policy
acquisition costs associated with the increase of premiums earned.



FINANCIAL CONDITION AND LIQUIDITY



As of
September 30, 2003, our total invested assets were $49,302,459, an increase of $3,035,153 or 6.6% from $46,267,306 at December 31, 2002. Cash and cash equivalents balances decreased from $3,159,545 at December 31, 2002 to $2,785,574 at September 30,
2003, a decrease of $373,971, or 11.8%. The amount of cash and cash equivalents varies depending on the maturities of fixed term investments and on the level of funds invested in money market mutual funds. The ratio of cash and invested assets to
total liabilities at September 30, 2003 was 1.40:1, compared to a ratio of 1.38:1 at September 30, 2002.



Assumed reinsurance premiums receivable are current assumed premiums receivable less commissions payable to the issuing carriers. This balance was
$514,992 at December 31, 2002 and $859,919 at September 30, 2003. This balance fluctuates due to the timing of renewal premiums written.



On June 1, 2000, the Board of Directors of our investment subsidiary, AmerInst Investment Company, Ltd., which holds almost all of our investment
portfolio, authorized our investment subsidiary to spend up to $1 million to purchase a portion of our outstanding common shares. On September 8, 2000, the Bermuda Monetary Authority authorized the purchase of up to 15,000 common shares pursuant to
the June 1 Board authorization. Later, on July 19, 2002, the Bermuda Monetary Authority authorized blanket permission for our investment company to purchase common shares from individuals who have died or retired from the practice of public
accounting and on a negotiated case-by-case basis without limit as to the amount. Purchases of shares by our investment subsidiary are affected through privately negotiated transactions and are in addition to our investment subsidiarys
practice of redeeming the shares of individuals who have died or retired from the practice of public accounting. To date, our investment subsidiary has purchased through privately negotiated transactions 16,430 common shares for purchase prices
totaling $513,106. In addition, our investment subsidiary has purchased 13,187 common shares from individuals who have died or retired for purchase prices totaling $582,024. We paid our thirty-third consecutive quarterly dividend or $0.65 per share
during the third quarter of 2003.



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AMERINST INSURANCE GROUP, LTD.



Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



INFLATION



We do
not believe our operations have been materially affected by inflation. The potential adverse impacts of inflation include: (a) a decline in the market value of our fixed term investment portfolio; (b) an increase in the ultimate cost of settling
claims which remain unresolved for a significant period of time; and (c) an increase in our operating expenses. However, we generally hold our fixed term investments to maturity and currently believe that the yield on those investments is adequate
to compensate us for the risk of inflation. In addition, we expect that any increase from inflation reflected in the ultimate cost of settling unpaid claims will offset by investment income earned during the period when the claims are outstanding.
Finally, we expect the carriers we reinsure to generally be able to match increases in operating expenses resulting from inflation with similarly inflationary increases in the premium rates.



Market Sensitive Instruments



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



(a) Interest Rate Risk.



Interest rate risk results from our ownership of interest-rate-sensitive instruments. We are exposed to potential losses arising from changes in the level
of interest rates on fixed rate instruments. We are also exposed to credit spread risk resulting from possible changes in the credit ratings of issuers of debt instruments we own.



(b) Foreign Exchange Risk.



We only invest in U.S. dollar denominated financial instruments and only enter into insurance transactions in U.S. dollars. Therefore, we do not believe
we have any exposure to foreign exchange risk.



(c) Equity
Price Risk



Equity price risk arises from fluctuations in the
value of equity securities we own. We invest in equity securities in order to diversify our investment portfolio, which our management believes will assist us in achieving our goal of increasing our capital and surplus. Our management has adopted
investment guidelines that include rate of return and asset allocation targets, as well as degree of risk and equity investment restrictions intended to minimize exposure to material risk from changes in equity prices.



The table below provides information about our investments available for sale
that were sensitive to change in interest rates at September 30, 2003 and December 31, 2002 respectively.



|                                                                                        |  | EstimatedFair Value09/30/2003 |            | EstimatedFair Value12/31/2002
|--------------------------------------------------------------------------------------- |  | ----------------------------- | ---------- | -----------------------------
|Fixed Income Portfolio                                                                  |  |                               |            |                              
|Due in 1 year or less                                                                   |  | $                             | 2,278,276  |                              
|Due after 1 year through 5 years                                                        |  |                               | 5,325,376  |                              
|Due after 5 years through 10 years                                                      |  |                               | 4,207,385  |                              
|Due after ten years                                                                     |  |                               | 651,581    |                              
|                                                                                        |  |                               |            |                              
|Sub-total                                                                               |  | $                             | 12,462,618 |                              
|Mortgage backed securities and Obligations of U.S. government Corporations and agencies |  | $                             | 19,726,871 |                              
|                                                                                        |  |                               |            |                              
|Total Fixed-Income                                                                      |  | $                             | 32,189,489 |                              
|                                                                                        |  |                               |            |                              



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##### Table of Contents

AMERINST INSURANCE GROUP, LTD.



Item 4. CONTROLS AND PROCEDURES



As of the end of the period covered by this report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and our Chief Financial Officer, of the
effectiveness of the design and operation of our disclosure controls and procedures pursuant to Exchange Act Rule 13a-14 under the Securities Exchange Act of 1934, as amended. Based upon that evaluation, our Chief Executive Officer and Chief
Financial Officer concluded that our disclosure controls and procedures are effective in ensuring that all material information required to be filed in this quarterly report has been made known to them in a timely fashion. There has been no change
in our internal control over financial reporting identified in that evaluation that occurred during our last fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



Part H.OTHER INFORMATION



Item 1. Legal Proceedings.



The
Company is not a party to any material legal proceedings.



Item 2. Changes in Securities and Use of Proceeds.



Not applicable.



Item 3. Defaults Upon Senior Securities



Not applicable.



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



Not applicable.



Item 5. Other Information



Not
applicable.



Item 6. Exhibits and Reports on Form 8-K



(a) Exhibits



See Index to Exhibits immediately
following the signature page.



(b) Reports on Form 8-K



We did not file any reports on Form 8-K during the quarter
ended September 30, 2003.



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##### Table of Contents

SIGNATURES



Pursuant to the
requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.



|Dated: November 14, 2003 |  | AMERINST INSURANCE GROUP, LTD. (Registrant)
|------------------------ |  | -------------------------------------------
|                         |  |                                            
|                         |  | By:                                        
|                         |  |                                            
|                         |  |                                            
|                         | 
|And By:                  |  | /S/    MURRAY NICOL                        
|                         | 
|                         |  |                                            



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##### Table of Contents

AMERINST INSURANCE GROUP, LTD.



INDEX TO EXHIBITS



Quarterly Period Ended September 30, 2003



|ExhibitNumber |  | Description                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|              | 
|3(i)          |  | Memorandum of Association of the Company (1)                                                                                                                                                                                                                                                                                                                                                                                                                             
|              | 
|3(ii)         |  | Bye-laws of the Company (1)                                                                                                                                                                                                                                                                                                                                                                                                                                              
|              | 
|4.1           |  | Section 47 of the Companys Bye-laws  included in Exhibit 3(ii) above                                                                                                                                                                                                                                                                                                                                                                                                   
|              | 
|4.2           |  | Statement of Share Ownership Policy, as Amended (9)                                                                                                                                                                                                                                                                                                                                                                                                                      
|              | 
|10.1          |  | Reinsurance Treaty between AIIC and Virginia Surety Company, Inc. (2)                                                                                                                                                                                                                                                                                                                                                                                                    
|              | 
|10.2          |  | Agreement between Country Club Bank and AIIC (2)                                                                                                                                                                                                                                                                                                                                                                                                                         
|              | 
|10.3          |  | Agreement between Country Club Bank and AIIG (2)                                                                                                                                                                                                                                                                                                                                                                                                                         
|              | 
|10.4          |  | Reinsurance Treaty between AIIC and CNA Insurance Companies (3), 1994 placement slip (4), 1995 placement slip (5), 1996 placement slip (6), 1997 placement slip (9), and 1998
placement slip (10) and Endorsement No. 1 to the Treaty effective July 1, 1999 (11)                                                                                                                                                                                                        
|              | 
|10.5          |  | Revised Management Agreement between Vermont Insurance Management, Inc. and AIIC dated May 1, 1997 (7), Addenda to Management Agreement dated July 1, 1997 (8), Addenda to
Management Agreement dated July 1, 1998 (10), Management Agreement between USA Offshore Management, Ltd. and AmerInst Insurance Company Ltd. dated as of December 2, 1999 (12) and Addenda to Agreement between AmerInst Insurance Company Ltd. and USA
Offshore Ltd. dated June 2, 2000 (12).
|              | 
|10.6          |  | Escrow Agreement among AIIC, United States Fire Insurance Company and Harris Trust and Savings Bank dated March 7, 1995 (5)                                                                                                                                                                                                                                                                                                                                              
|              | 
|10.7          |  | Security Trust Agreement among AIIC, Harris Trust and Savings Bank and Virginia Surety Company, Inc. dated March 9, 1995 (5)                                                                                                                                                                                                                                                                                                                                             
|              | 
|10.8          |  | Investment Advisory Agreement for Discretionary Accounts between AmerInst Insurance Company and Harris Associates L.P. dated as of January 22, 1996, as amended by the Amendment to
Investment Advisory Agreement for Discretionary Accounts dated as of April 2, 1996 (10)                                                                                                                                                                                              
|              | 
|10.9          |  | Exchange Agreement between the Company, AIG Ltd., dated as of January 20, 1999 (1)                                                                                                                                                                                                                                                                                                                                                                                       
|              | 
|10.10         |  | Reinsurance Treaty between AMIC Ltd. and CNA Insurance Companies, effective December 1, 1999 (11)                                                                                                                                                                                                                                                                                                                                                                        
|              | 
|10.11         |  | Value Plan Reinsurance Treaty between AMIC Ltd. and CNA Insurance Companies, effective December 1, 1999 (11)                                                                                                                                                                                                                                                                                                                                                             
|              | 
|10.12         |  | Trust Agreement among AMIC Ltd., Continental Casualty Company and Chase Manhattan Bank dated as of December 21, 2000 (13)                                                                                                                                                                                                                                                                                                                                                
|              | 
|10.13         |  | Investment Counsel Agreement between AMIC Ltd. and Northeast Investment Management, Inc. dated August 1, 2000 (13)                                                                                                                                                                                                                                                                                                                                                       
|              | 
|10.14         |  | Registrar and Transfer Agent Agreement between AMIC Ltd. and Butterfield Corporate Services Limited dated as of January 1, 2001 (14)                                                                                                                                                                                                                                                                                                                                     
|              | 
|10.15         |  | Reinsurance Treaty between AMIC Ltd. and CNA Insurance Companies, effective January 1, 2002 (15)                                                                                                                                                                                                                                                                                                                                                                         
|              | 
|10.16         |  | Value Plan Reinsurance Treaty between AMIC Ltd. and CNA Insurance Companies, effective January 1, 2002 (15)                                                                                                                                                                                                                                                                                                                                                              
|              | 
|10.17         |  | Reinsurance Placement Slip between AMIC Ltd. and Professional Direct Insurance Company (PDIC) effective January 1, 2003 (16)                                                                                                                                                                                                                                                                                                                                             
|              | 
|23            |  | Consent of Independent Accountants (11)                                                                                                                                                                                                                                                                                                                                                                                                                                  
|              | 
|27            |  | Financial Data Schedule (14)                                                                                                                                                                                                                                                                                                                                                                                                                                             



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##### Table of Contents

|ExhibitNumber |  | Description                                                                                                                          
|------------- |  | -------------------------------------------------------------------------------------------------------------------------------------
|              | 
|31.1          |  | Certification of Stuart Grayston required by Rule 13a-14(a) or 15d-14(a) adopted under the Securities Exchange Act of 1934.          
|              | 
|31.2          |  | Certification of Murray Nicol required by Rule 13a-14(a) or 15d-14(a) adopted under the Securities Exchange Act of 1934.             
|              | 
|32.1          |  | Certification of Stuart Grayston pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.
|              | 
|32.2          |  | Certification of Murray Nicol pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of Sarbanes-Oxley Act of 2002.   

---

|(1) | Filed with AmerInst Insurance Group, Ltd.s (the Companys) Registration Statement on Form S-4, Registration No. 333-64929 and incorporated herein by
reference.
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------

|(2) | Filed with AmerInst Insurance Group, Inc.s, (AIIGs) Annual Report on Form 10-K for the year ended December 31, 1992 and incorporated herein by reference.
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------

|(3) | Filed with the AIIGs Annual Report on Form 10-K for the year ended December 31, 1993 and incorporated herein by reference.
|--- | ---------------------------------------------------------------------------------------------------------------------------

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

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

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

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

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

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

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

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

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

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

|(14) | Filed with the Companys Quarterly Report on Form 10-Q for the quarter ended December 31, 2001 and incorporated herein by reference.
|---- | ------------------------------------------------------------------------------------------------------------------------------------

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

|(16) | Filed with the Companys Quarterly Report on Form 10-Q for the quarter ended March 31, 2003 and incorporated herein by reference.
|---- | ---------------------------------------------------------------------------------------------------------------------------------



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