SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    Form 10-Q

(Mark One)

(x)  QUARTERLY  REPORT  PURSUANT  TO  SECTION  13 OR 15 (d)  OF  THE  SECURITIES
     EXCHANGE ACT OF 1934

For the quarterly period ended             March 31, 2001
                                  ----------------------------------

                                       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                   0-22316
                                   --------------------

                            Penn-America Group, Inc.
        -----------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Pennsylvania                                 23-2731409
-------------------------------            -----------------------------------
(State or other jurisdiction of            (I.R.S. Employer Identification No.)
 incorporation or organization)


                420 South York Road, Hatboro, Pennsylvania 19040
     -----------------------------------------------------------------------
          (Address of principal executive offices, including zip code)


                                 (215) 443-3600
     -----------------------------------------------------------------------
              (Registrant's telephone number, including area code)


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 other  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       .
       -----      ----

At May 11, 2001,  7,592,525  shares of the registrant's  common stock,  $.01 par
value, were outstanding.




                                     Page 1
<PAGE>



                    Penn-America Group, Inc. and Subsidiaries
                                      Index

<TABLE>
<CAPTION>
                                                                                        Page Number

Part I - Financial Information
<S>                                                                                       <C>
         Consolidated Balance Sheets - March 31, 2001 (unaudited) and
                December 31, 2000                                                            3

         Consolidated Unaudited Statements of Operations - For the three
                 months ended March 31, 2001 and 2000                                        4

         Consolidated Unaudited Statement of Stockholders' Equity -
                For the three months ended March 31, 2001                                    5

         Consolidated Unaudited Statements of Cash Flows -
                For the three months ended March 31, 2001 and 2000                           6

         Notes to Unaudited Consolidated Financial Statements                                7

         Management's Discussion and Analysis of Financial Condition
                and Results of Operations                                                   11

Part II - Other Information                                                                 14

</TABLE>




                                     Page 2
<PAGE>

<TABLE>
<CAPTION>
                                          PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
                                                 Consolidated Balance Sheets
                                            (In thousands, except per share data)
                                                                                           March 31,           December 31,
                                                                                              2001                 2000
                                                                                        ----------------     -----------------
<S>                                                                                       <C>                 <C>
ASSETS                                                                                    (Unaudited)
Investments:
    Fixed maturities:
       Available for sale, at fair value (amortized cost 2001, $127,309; 2000,             $  130,698           $  125,477
       $123,873)
       Held to maturity, at amortized cost (fair value 2001, $17,619; 2000, $17,441)           17,294               17,282
    Equity securities, at fair value (cost 2001, $29,389; 2000, $27,324)                       25,783               24,491
                                                                                        ----------------     -----------------
       Total investments                                                                      173,775              167,250
Cash                                                                                            5,416               11,425
Accrued investment income                                                                       1,975                2,181
Premiums receivable, net                                                                       10,621                9,695
Reinsurance recoverable                                                                        24,466               24,447
Prepaid reinsurance premiums                                                                    4,348                4,635
Deferred policy acquisition costs                                                               9,716               10,317
Capital lease                                                                                   1,731                1,753
Deferred income taxes                                                                           4,103                4,272
Income tax recoverable                                                                          2,474                2,982
Other assets                                                                                      570                  529
                                                                                        ----------------     -----------------
       Total assets                                                                        $  239,195           $  239,486
                                                                                        ================     =================

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
  Unpaid losses and loss adjustment expenses                                               $  115,542           $  115,314
  Unearned premiums                                                                            40,965               43,239
  Accounts payable and accrued expenses                                                         2,579                2,353
  Capitalized lease obligation                                                                  1,670                1,701
  Other liabilities                                                                             3,169                2,828
                                                                                        ----------------     -----------------
         Total liabilities                                                                    163,925              165,435
                                                                                        ----------------     -----------------

Stockholders' equity:
  Preferred stock, $.01 par value; authorized 2,000,000 shares;
    None issued                                                                                    --                   --
  Common stock, $.01 par value; authorized 20,000,000 shares;
    issued 2001 and 2000, 10,086,525 and 10,076,025 shares, respectively;
    outstanding 2001 and 2000, 7,586,525 and 7,576,025 shares, respectively                       101                  101
  Additional paid-in capital                                                                   70,226               70,164
   Accumulated other comprehensive loss                                                          (144)                (811)
  Retained earnings                                                                            30,152               29,583
  Treasury stock, 2,500,000 shares in 2001 and 2000 at cost                                   (24,161)             (24,161)
   Officers' stock loans                                                                         (655)                (546)
  Unearned compensation from restricted stock awards                                             (249)                (279)
                                                                                        ----------------     -----------------
         Total stockholders' equity                                                            75,270               74,051
                                                                                        ----------------     -----------------

         Total liabilities and stockholders' equity                                        $  239,195           $  239,486
                                                                                        ================     =================
</TABLE>

                                                            Page 3
<PAGE>

                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
                      Consolidated Statements of Operations
                                   (Unaudited)

               For the three months ended March 31, 2001 and 2000
                      (In thousands, except per share data)


                                                         Three months ended
                                                              March 31,
                                                    --------------------------
                                                       2001              2000
                                                    --------          --------
Revenues
Premiums earned                                     $ 23,042          $ 21,546
Net investment income                                  2,850             2,400
Net realized investment gain (loss)                      102               (13)
                                                    --------          --------
    Total revenues                                    25,994            23,933
                                                    --------          --------

Losses and expenses
Losses and loss adjustment expenses                   16,734            13,905
Amortization of deferred policy acquisition costs      6,224             6,239
Other underwriting expenses                            1,534             1,430
Corporate expenses                                       162               220
Interest expense                                          40                36
                                                    --------          --------
    Total losses and expenses                         24,694            21,830
                                                    --------          --------


Income before income tax                               1,300             2,103
Income tax expense                                       333               520

                                                    --------          --------
Net income                                          $    967          $  1,583
                                                    ========          ========

Net income per share, basic and diluted             $   0.13          $   0.20





                                     Page 4

<PAGE>



<TABLE>
<CAPTION>
                                            PENN-AMERICA GROUP, INC. AND SUBSIDIARIES

                                         Consolidated Statement of Stockholders' Equity
                                                           (Unaudited)

                                            For the three months ended March 31, 2001
                                              (In thousands, except per share data)


                                                                                                       Unearned
                                                                                                     Compensation
                                                    Accumulated                                          From
                                       Additional      Other                             Officers'    Restricted     Total
                              Common     Paid-In   Comprehensive   Retained   Treasury     Stock        Stock     Stockholders'
                               Stock    Capital    Income (Loss)   Earnings    Stock       Loans        Awards       Equity
                             --------------------------------------------------------------------------------------------------
<S>                          <C>     <C>            <C>           <C>        <C>         <C>         <C>         <C>
Balance at December 31, 2000   $ 101   $ 70,164      $ ( 811)      $ 29,583   $ (24,161)  $  (546)    $ (279)     $ 74,051
Net income                        --         --           --            967          --        --         --           967
Other comprehensive income:
  unrealized gains on
  investments, net of
  tax and reclassification
  adjustment                      --         --          667             --          --        --         --           667
                                                                                                                 --------------
Comprehensive income                                                                                                 1,634
                                                                                                                 --------------
Issuance of common stock          --         62           --             --          --        --         --            62
Officers' stock loans             --         --           --             --          --      (109)        --          (109)
Amortization of compensation
  expense from restricted
  stock awards issued             --         --           --             --          --        --         30            30
Cash dividends paid
  ($0.0525 per share)             --         --           --           (398)         --        --         --          (398)
                             --------------------------------------------------------------------------------------------------
Balance at March 31, 2001      $ 101   $ 70,226      $  (144)      $ 30,152   $ (24,161)  $  (655)    $ (249)     $ 75,270
                             ==================================================================================================
</TABLE>

                                                             Page 5
<PAGE>

<TABLE>
<CAPTION>
                                          PENN-AMERICA GROUP, INC. AND SUBSIDIARIES
                                            Consolidated Statements of Cash Flows
                                                         (Unaudited)

                                      For the three months ended March 31, 2001 and 2000
                                                        (In thousands)

                                                                                          Three months ended March 31,
                                                                                      --------------------------------------
                                                                                           2001                   2000
                                                                                      ---------------        ---------------
<S>                                                                                   <C>                      <C>
Cash flows from operating activities:
    Net income                                                                          $       967            $     1,583
    Adjustments to reconcile net income to net cash provided (used) by Operating
      activities:
         Amortization and depreciation expense                                                  (26)                   154
         Net realized investment (gains) losses                                                (102)                    13
         Deferred income tax (benefit) expense                                                 (175)                     7
         Net decrease in premiums receivable, prepaid reinsurance premiums
           and unearned premiums                                                             (2,913)                   (12)
         Net increase (decrease) in unpaid losses and loss adjustment expenses
           and reinsurance recoverable                                                          209                   (323)
         Accrued investment income                                                              206                   (335)
         Deferred policy acquisition costs                                                      601                   (536)
         Income tax recoverable                                                                 508                  1,652
         Other assets                                                                           (41)                    52
         Accounts payable and accrued expenses                                                  226                    265
         Other liabilities                                                                      341                    833
                                                                                      ---------------        ---------------
         Net cash provided (used) by operating activities                                      (199)                 3,353
                                                                                      ---------------        ---------------

Cash flows from investing activities:
    Purchases of equity securities                                                           (2,065)                (2,260)
    Purchases of fixed maturities available for sale                                         (9,905)                (8,276)
    Purchases of fixed maturities held to maturity                                               --                 (9,899)
    Proceeds from sales of equity securities                                                     --                  2,736)
    Proceeds from sales and maturities of fixed maturities available for sale                 6,636                  9,689
    Proceeds from maturities and calls of fixed maturities held to maturity                      --                  3,000
    Change in short-term investments                                                             --                    449
                                                                                      ---------------        ---------------
         Net cash used by investing activities                                               (5,334)                (4,561)
                                                                                      ---------------        ---------------

Cash flows from financing activities:
    Issuance of common stock                                                                     62                     --
    Purchase of treasury stock                                                                   --                 (2,648)
    Officers' stock loans                                                                      (109)                  (508)
    Principal payments on capital lease obligations                                             (31)                   (34)
    Dividends paid                                                                             (398)                  (420)
                                                                                      ---------------        ---------------
         Net cash used by financing activities                                                 (476)                (3,610)
                                                                                      ---------------        ---------------

Decrease in cash                                                                             (6,009)                (4,818)
Cash, beginning of period                                                                    11,425                 12,045
                                                                                      ---------------        ---------------
Cash, end of period                                                                     $     5,416            $     7,227
                                                                                      ===============        ===============

Supplemental disclosure of cash flow information:
      Interest paid                                                                     $        40            $        36
      Taxes recovered                                                                            --                 (1,500)
</TABLE>

                                                           Page 6
<PAGE>


                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements



Note 1 - Organization and Basis of Presentation

         Penn-America  Group,  Inc.  ("PAGI" or the  "Company")  is an insurance
holding  company.  Approximately  41% of the  outstanding  common  stock  of the
Company was owned by Penn Independent  Corporation ("Penn Independent") at March
31, 2001.  The  accompanying  financial  statements  include the accounts of the
Company  and  its  wholly  owned  subsidiary,   Penn-America  Insurance  Company
("Penn-America")  and its wholly owned subsidiary, Penn-Star  Insurance  Company
("Penn-Star").

         Penn-America and Penn-Star  underwrite  commercial property and general
liability  insurance  and  multi-peril  insurance,   generally  referred  to  as
"property and casualty"  insurance.  The  companies  write their  business on an
excess and  surplus  lines,  or  non-standard,  basis as well as on an  admitted
basis.  Penn-America  and Penn-Star can write  business in all 50 states and the
District of  Columbia.  The  companies  write  business on both an admitted  and
excess and  surplus  lines basis in 33 states,  on an  admitted  basis only in 5
states and on an excess and surplus lines basis only in 13 states.

         The accompanying  condensed unaudited consolidated financial statements
and notes have been prepared in accordance with accounting  principles generally
accepted in the United States  ("GAAP") for interim  financial  information  and
with  the   instructions  to  Form  10-Q  and  Article  10  of  Regulation  S-X.
Accordingly,  they do not include all of the  information  and notes required by
GAAP for  complete  financial  statements.  In the  opinion of  management,  all
adjustments   (consisting  of  normal  and  recurring  adjustments)   considered
necessary for a fair  presentation  of results for the interim periods have been
included.  All  significant  intercompany  accounts and  transactions  have been
eliminated in  consolidation.  It is suggested  that these  condensed  unaudited
consolidated  financial  statements  and notes be read in  conjunction  with the
financial  statements  and notes in the  Company's  2000 Annual Report which was
incorporated  by  reference  into the  Company's  Form  10-K for the year  ended
December 31, 2000. The Company's  results of operations for interim  periods are
not necessarily indicative of the results to be expected for the entire year.

Note 2 - Reinsurance

         Premiums  earned are  presented  net of amounts  ceded to reinsurers of
$3.0  million  and $2.6  million for the three  months  ended March 31, 2001 and
2000,  respectively.  Losses and loss  adjustment  expenses are presented net of
amounts  ceded to  reinsurers  of $2.7  million  and $1.9  million for the three
months ended March 31, 2001 and 2000, respectively.

Note 3 - Comprehensive Income

           Accumulated other comprehensive income (loss) of the Company consists
solely of unrealized gains or losses on investment  securities net of applicable
income tax expense or benefit and reclassification adjustments.


                                     Page 7

<PAGE>


                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements
                                   (continued)


Note 4 - Income Per Share

         The following is a reconciliation of the numerators and denominators of
the basic and diluted income per share computations:

                                                      Three months ended
(in thousands, except per share data)                     March 31,
                                                    ----------------------
                                                     2001            2000
                                                    ------          ------

Basic per share computation:
Net income                                          $  967          $1,583


Weighted average common shares outstanding           7,579           7,972
                                                    ------          ------

Basic net income per share                          $ 0.13          $ 0.20
                                                    ======          ======

Diluted per share computation:
Net income                                          $  967          $1,583

Weighted average common shares outstanding           7,579           7,972

Additional shares outstanding after the assumed
      exercise of stock options by applying the
      treasury stock method                             56              38
                                                    ------          ------


Total shares
                                                     7,635           8,010
                                                    ======          ======

Diluted net income per share                        $ 0.13          $ 0.20
                                                    ======          ======













                                     Page 8
<PAGE>

                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements
                                   (continued)

Note 5- Segment Information

         The  Company  has  two  reportable  segments:   non-standard   personal
automobile and  commercial  lines.  The Company  announced in April 1999 that it
would run-off its remaining portfolio of the personal lines automobile business,
which was  underwritten  through a single agent in  California.  This followed a
decision   earlier  in  1999  to  eliminate   the  remainder  of  the  Company's
non-standard personal automobile business in nine other states. The Company will
continue to report on this segment  separately until the amounts relating to the
non-standard  personal  automobile  business become  immaterial to the financial
statements  presented.  These segments are managed  separately because they have
different  customers,  pricing and  expense  structures.  The  Company  does not
allocate  assets  between  segments  because  assets  are  reviewed  in total by
management for decision-making purposes.

         The  accounting  policies  of the  segments  are the same as those more
fully described in the summary of significant  accounting  policies in Note 1 of
the Company's 2000 Annual Report,  which was  incorporated by reference into the
Company's 2000 Form 10-K. The Company  evaluates  segment profit based on profit
or loss from operating activities. Segment profits or losses from operations are
pre-tax and do not include unallocated expenses but do include investment income
attributable  to  insurance  transactions.  Segment  profit  or  loss  therefore
excludes  federal  income  taxes,  unallocated  expenses and  investment  income
attributable to equity as opposed to investment income attributable to insurance
transactions.

         The following is a summary of the Company's segment revenues,  expenses
and profit:
<TABLE>
<CAPTION>
(in thousands)                                                     Three months ended March 31, 2001
                                                                   ---------------------------------
                                                                                Personal
                                                              Commercial       Automobile         Total
                                                             ----------------------------------------------
<S>                                                             <C>                <C>            <C>
Premiums earned                                                 $  23,026          $    16        $ 23,042


Net investment income from insurance operations                     1,866               84           1,950
                                                             ----------------------------------------------

Total segment revenues                                             24,892              100          24,992
                                                             ------------- -- ------------- --- -----------

Segment losses and loss adjustment expenses                        17,930           (1,196)         16,734
Segment expenses                                                    6,591                5           6,596
                                                             ----------------------------------------------
Total segment expenses                                             24,521           (1,191)         23,330
                                                             ----------------------------------------------

Segment income                                                    $   371         $  1,291        $  1,662
                                                             ----------------------------------------------
Unallocated items:
Net investment income from equity                                                                    1,002

Unallocated expenses                                                                                (1,364)
Income tax expense                                                                                    (333)
                                                                                                -----------
Net income                                                                                          $  967
                                                                                                ===========
</TABLE>


                                     Page 9
<PAGE>


                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES

              Notes to Unaudited Consolidated Financial Statements
                                   (continued)


Note 5- Segment Information (Continued)

<TABLE>
<CAPTION>
 (in thousands)                                               Three months ended March 31, 2000
                                                              ---------------------------------
                                                          Commercial       Personal
                                                                          Automobile         Total
                                                        ----------------------------------------------
<S>                                                         <C>              <C>              <C>
Premiums earned                                             $19,776          $ 1,770          $21,546

Net investment income from insurance operations               1,197              156            1,353
                                                        ----------------------------------------------
Total segment revenues                                       20,973            1,926           22,899
                                                        ----------------------------------------------

Segment losses and loss adjustment expenses                  12,753            1,152           13,905
Segment expenses                                              6,055              645            6,700
                                                        ----------------------------------------------
Total segment expenses                                       18,808            1,797           20,605
                                                        ----------------------------------------------

Segment income                                              $ 2,165          $   129          $ 2,294
                                                        ----------------------------------------------
Unallocated items:
Net investment income from equity                                                               1,034

Unallocated expenses
                                                                                               (1,225)
Income tax expense                                                                               (520)
                                                                                           -----------
Net income                                                                                     $1,583
                                                                                           ===========
</TABLE>




                                    Page 10
<PAGE>

                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES

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


Results of Operations

Three Months Ended March 31, 2001 and 2000

         Premiums  earned  increased  6.9% to $23.0 million for the three months
ended March 31, 2001 from $21.5  million  for the three  months  ended March 31,
2000, due to a 16.4% increase in commercial earned premiums, partially offset by
a 99.1% decline in non-standard personal automobile earned premiums. The Company
announced in 1999 that it is running off its  non-standard  personal  automobile
business.

         Gross written premiums  decreased 9.3% for the three months ended March
31, 2001 to $23.8  million  compared to $26.3 million for the three months ended
March 31, 2000, due to a 4.0% decrease in commercial  gross written premiums and
a 99.9% decline in non-standard personal automobile premiums.

         Net written  premiums  decreased 10.0% for the three months ended March
31, 2001 to $21.1  million  compared to $23.4 million for the three months ended
March 31, 2000, due to a 4.1% decrease in commercial net written  premiums and a
99.9% decline in non-standard personal lines.

         Net  investment  income  increased  18.8% to $2.9 million for the three
months ended March 31, 2001,  from $2.4 million for the three months ended March
31, 2000. This increase resulted  principally from an increase in the investment
yield of the fixed  income  investment  portfolio  and the  growth  in  invested
assets.

         Losses and loss  adjustment  expenses  increased 20.3% to $16.7 million
for the three  months  ended March 31,  2001,  from $13.9  million for the three
months ended March 31, 2000.

         Amortization  of deferred  policy  acquisition  costs ("DAC")  remained
unchanged  at $6.2  million for the three  months ended March 31, 2001 and March
31,  2000.   Although  earned  premiums   increased  as  discussed   above,  DAC
amortization remained flat due to a reduction in commission rates.

         Other  underwriting  expenses  increased  7.3% to $1.5  million for the
three months ended March 31, 2001,  from $1.4 million for the three months ended
March 31, 2000.

         The overall statutory combined ratio for the Company increased to 106.9
for the three months ended March 31, 2001,  from 99.8 for the three months ended
March 31, 2000, primarily due to the increase in the loss ratio to 72.6 in 2001,
compared to 64.5 in 2000.  The  expense  ratio  decreased  to 34.3 for the three
months ended March 31,  2001,  compared to 35.3 for the three months ended March
31, 2000, due in part to the aforementioned commission reduction.

         As a result of the factors  described  above,  net income for the three
months  ended  March 31,  2001 was $1.0  million  or $0.13 per share  (basic and
diluted),  compared to net income of $1.6  million or $0.20 per share (basic and
diluted) for the three months ended March 31, 2000.





                                    Page 11
<PAGE>

                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES

         Management's Discussion and Analysis of Financial Condition and
                             Results of Operations
                                   (continued)

Liquidity and Capital Resources


         PAGI is a holding  company,  the principal asset of which is the common
stock of Penn-America. The principal source of cash for the payment of dividends
to PAGI's stockholders,  PAGI operating expenses and repurchase of PAGI stock is
dividends from Penn-America and Penn-Star.  Penn-America's  principal sources of
funds are operations,  investment income and proceeds from sales and redemptions
of investments.  Funds are used by Penn-America and Penn-Star principally to pay
claims and operating expenses,  to purchase investments and to make dividend and
other payments to PAGI.

         Penn-America  is required by law to maintain a certain  minimum surplus
on a  statutory  basis and is subject to  risk-based  capital  requirements  and
regulations  under which payment of dividends from statutory surplus may require
prior approval from the Pennsylvania Insurance Department.  Penn-America may pay
dividends to PAGI  without  advance  regulatory  approval  only from  unassigned
surplus and only to the extent that all  dividends in the past twelve  months do
not exceed the  greater of 10% of total  statutory  surplus,  or  statutory  net
income for the prior year. Using this criteria,  the available ordinary dividend
for 2001 is $5.5 million.  No ordinary  dividends  were paid to PAGI in 2000. In
2000,  Penn-America  paid a $6.4  million  return  of  capital  to  PAGI,  after
receiving approval from the Pennsylvania  Insurance Department,  which PAGI used
to  repurchase  stock  and  to  pay  dividends  and  PAGI  operating   expenses.
Penn-America paid a $0.6 million dividend to PAGI on May 9, 2001.

         Net cash used by  operating  activities  was $0.2 million for the three
months  ended March 31,  2001,  compared to $3.4  million  provided by operating
activities for the three months ended March 31, 2000.

         Net cash used by  investing  activities  was $5.3 million for the three
months ended March 31, 2001, compared to $4.6 million for the three months ended
March 31, 2000.

         Net cash used by  financing  activities  was $0.5 million for the three
months ended March 31, 2001, compared to $3.6 million for the three months ended
March 31, 2000. In 2000, $2.6 million was used to purchase  treasury stock,  and
no such purchases were made in 2001.

         Statutory  surplus as of March 31, 2001 increased to $58.7 million from
$55.5 million as of March 31, 2000, due primarily to a $2.7 million net positive
impact of adopting the standard set of statutory accounting  principles known as
"codification".

         The  Company   believes  it  has  sufficient   liquidity  to  meet  its
anticipated  insurance  obligations and operating and capital expenditure needs.
The   Company's   investment   strategy   emphasizes   quality,   liquidity  and
diversification, as well as total return. With respect to liquidity, the Company
considers  liability  durations,  specifically  related to loss  reserves,  when
determining  desired investment  maturities.  In addition,  maturities have been
staggered   to  produce   cash  flows  for  loss   payments   and   reinvestment
opportunities.

         The Company's  fixed maturity  portfolio of $148.0 million was 85.2% of
the total investment portfolio as of March 31, 2001.  Approximately 95% of these
securities were rated "A" or better by Standard & Poor's or Moody's. The average
duration of the fixed maturity  portfolio as of March 31, 2001 was approximately



                                    Page 12
<PAGE>

3.53 years. Equity securities, the majority of which consist of preferred stocks
and exchange traded funds,  were $25.8 million or 14.8% of total  investments as
of March 31, 2001.

         As of March 31, 2001, the investment  portfolio contained $46.9 million
of  mortgage/asset-backed  obligations,  which  represents  27.0%  of the  total
investments as of March 31, 2001.  All of these  securities  were  "AA"-rated or
better  and 73.8%  were  "AAA"-rated  by  Standard  & Poor's or  Moody's.  These
securities,  which were  issued by  government,  government-related  agencies or
publicly held corporations, are publicly traded, and have market values obtained
from an  independent  pricing  service.  Changes in estimated  cash flows due to
changes in prepayment  assumptions  from the original  purchase  assumptions are
revised  based on  current  interest  rates and the  economic  environment.  The
Company had no derivative financial instruments, real estate or mortgages in the
investment portfolio as of March 31, 2001.














                                    Page 13
<PAGE>


                    PENN-AMERICA GROUP, INC. AND SUBSIDIARIES


                           PART II. OTHER INFORMATION



Item 1.       Legal Proceedings - None

Item 2.       Changes in Securities - None

Item 3.       Default Upon Senior Securities - None

Item 4.       Submission of Matters to a Vote by Security Holders - None

Item 5.       Other Information - None

Item 6.       Exhibits and Reports on Form 8-K

              On April 3, 2001, the Company filed a current report on Form 8-K
              announcing the availability of annual statements of its insurance
              subsidiaries, Penn-America Insurance Company and Penn-Star
              Insurance Company, on the Company's website, in hard copy from the
              Company, or from the Pennsylvania Insurance Department. This
              filing was made relative to Regulation FD requirements only.













                                    Page 14
<PAGE>

                                    SIGNATURE



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.




                                       Penn-America Group, Inc.




Date:        May 11, 2001               By:     /s/ Jon S. Saltzman
           -----------------                    --------------------
                                                Jon S. Saltzman
                                                President and
                                                Chief Executive Officer



                                        By:     /s/ Joseph F. Morris
                                                --------------------
                                                Joseph F. Morris
                                                Senior Vice President and
                                                Chief Financial Officer








                                     Page 15