<PAGE>


                         UNITED STATES
               SECURITIES AND EXCHANGE COMMISSION
                    WASHINGTON, D.C.  20549

                           FORM 10-Q

     (X)  Quarterly report under section 13 or 15(d) of the
     Securities Exchange Act of 1934.   For the quarter ended
     September 30, 1998.

                               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:  1-11920


                      MMI Companies, Inc.
     (Exact name of registrant as specified in its charter)

           Delaware                        36-3263253
(State or other jurisdiction of           (IRS Employer
incorporation or organization)         (Identification No.)

      540 Lake Cook Road, Deerfield, Illinois  60015-5290
            (Address of principal executive offices)

                         (847) 940-7550
      (Registrant's telephone number, including area code)

                         Not applicable
     (Former name, former address and former fiscal year,
                 if changed since last report)

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

There were 18,992,393 shares outstanding of the registrant's
common stock, $0.10 par value, as of November 11, 1998.






                          Page 1 of 14


<PAGE>


              MMI Companies, Inc. and Subsidiaries

                             Index
<TABLE>
<CAPTION>

                                                          
                                                        Page No.
<S>                                                     <C>
Part I.  Financial Information                          

          Item 1.  Financial Statements                 

               Consolidated Balance Sheets             3

               Consolidated Statements of              4
                 Operations

               Consolidated Statements of              5
                 Stockholders' Equity

               Consolidated Statements of              6
                 Cash Flows

               Notes to Consolidated                   7
                 Financial Statements

          Item 2.  Management's Discussion            10
                   and Analysis of
                   Financial Condition and
                   Results of Operations


Part II.  Other Information                             

          Item 6.  Exhibits and Reports on            13
                   Form 8-K

Signatures                                            14

EXHIBITS:                                               

        4.2   Amended  and Restated  Rights             
              Agreement
        27.   Financial Data Schedule                       

</TABLE>

<PAGE>
                MMI Companies, Inc. and Subsidiaries
                     Consolidated Balance Sheets
                (In thousands, except per share data)
<TABLE>
<CAPTION>
                                              September 30,   December 31,
                                                  1998            1997
                                              (Unaudited)
<S>                                                       
                                              <C>             <C>
ASSETS                                                              
   INVESTMENTS                                                      
       Short-term investments...........   $   61,613      $   52,219
       Fixed maturities.................    1,164,357       1,135,702
       Preferred stocks.................       58,303          42,879
                                            1,284,273       1,230,800
   OTHER ASSETS                                                     
       Cash.............................        7,489           6,698
       Premium and fees receivable......      188,933         165,906
       Reinsurance receivables..........      331,402         300,077
       Prepaid reinsurance premiums.....       30,046          21,514
       Accrued investment income........       18,667          17,045
       Cost in excess of net assets of                              
         purchased subsidiaries,
         less accumulated amortization..       40,294          37,257
       Furniture and equipment - at cost,                           
         less accumulated depreciation..       14,823          14,258
       Deferred income taxes............       35,137          42,979
       Other............................       57,254          47,533
                                           $2,008,318      $1,884,067
LIABILITIES AND STOCKHOLDERS' EQUITY                                
   LIABILITIES                                                      
       Policy liabilities:                                          
         Loss and loss adjustment expense                          
          reserves:
          Medical malpractice liability..  $  671,531      $  613,063
          International..................     494,397         500,032
          Other..........................      16,700          12,051
                                            1,182,628       1,125,146

         Unearned premium reserves.......     179,039         134,188
         Future life policy benefits.....       8,052           8,723
                                            1,369,719       1,268,057

       Accrued expenses and other                                   
        liabilities......................      50,521          50,071
       Amounts due to reinsurers.........      57,784          48,213
       Company-obligated, mandatorily                               
        redeemable preferred                                                
        capital securities of subsidiary                         
        trust holding solely          
        junior subordinated debentures
        of the Company....................     118,778         118,724
                                             1,596,802       1,485,065

   STOCKHOLDERS' EQUITY                                             
      Common Stock, par value $.10 per share:
          Authorized shares:  - 30,000                              
          Issued and outstanding shares:                            
          1998 - 18,991; 1997 - 18,857...       1,899           1,886
      Additional paid-in capital.........     220,502         217,855
      Retained earnings..................     154,547         154,929
      Accumulated other comprehensive                               
       income, net of taxes:
       1998 - $17,702; 1997 - $12,812....      34,568          24,332
                                              411,516         399,002
                                           $2,008,318      $1,884,067
                                                          
       </TABLE>

               See notes to consolidated financial statements.

<PAGE>
                MMI Companies, Inc. and Subsidiaries
                Consolidated Statements of Operations
                (In thousands, except per share data)
                              Unaudited
<TABLE>
<CAPTION>
                                   Three Months         Nine Months
                                Ended September 30,  Ended September 30,    
                                    1998  1997         1998   1997
                                                       
<S>                             <C>       <C>         <C>     <C>  
REVENUES                                                                
                                                                        
Insurance premiums earned:                                               
 Medical malpractice                    
    liability...............   $ 42,114  $ 38,904    $152,350 $114,789
 International..............     32,599    19,684      93,314   84,132          
 Life and health............      2,754     1,406       9,440    3,832
                                 77,467    59,994     255,104  202,753         
Consulting and fee income...     11,853    13,492      37,226   38,800         
Net investment income            19,372    20,235      57,110   57,215
Net realized gains on                                                    
investments.................        957       649       1,990    1,619
TOTAL REVENUES..............    109,649    94,370     351,430  300,387
                                                                         
LOSSES AND EXPENSES                                                    
                                                                       
Losses and loss adjustment                                             
expenses:
 Medical malpractice          
    liability................    55,221    32,555     153,232   94,649
 International...............    24,233     8,427      62,498   47,836
 Life and health.............     2,527       594       7,563    2,858
                                 81,981    41,576     223,293  145,343
Insurance and administrative                                      
expenses.....................    41,754    36,284     117,299  108,297
Interest expense.............     2,491     1,607       7,388    4,523
  TOTAL LOSSES AND EXPENSES..   126,226    79,467     347,980  258,163

  INCOME (LOSS) BEFORE INCOME                                              
   TAXES AND EXTRAORDINARY  
   LOSS......................   (16,577)   14,903      3,450    42,224 
Income taxes (credit)........    (3,574)    2,673       (726)    8,287
  INCOME (LOSS) BEFORE                                             
   EXTRAORDINARY LOSS........   (13,003)   12,230      4,176    33,937
Extraordinary loss, net of                                               
tax..........................         -         -          -       267
   NET INCOME (LOSS).........  $(13,003)  $12,230     $4,176   $33,670
    
Earnings per common and                                               
common equivalent share:
                                                                      
Basic:                                                                   
Income (loss) before           
extraordinary loss...........  $  (0.69)  $  0.65      $ 0.22   $ 1.81
Extraordinary loss, net of                                            
tax..........................        -          -           -    (0.01) 
NET INCOME (LOSS)............  $  (0.69)  $  0.65      $ 0.22   $ 1.80
                                                                         
Diluted:                                                                 
Income (loss) before               
extraordinary loss...........  $  (0.69)  $  0.63      $ 0.22   $ 1.74
Extraordinary loss, net of                                            
tax..........................         -         -           -    (0.01)
NET INCOME (LOSS)............  $  (0.69) $   0.63      $ 0.22   $ 1.73
</TABLE>
           See notes to consolidated financial statements.


<PAGE>

                 MI Companies, Inc. and Subsidiaries
           Consolidated Statements of Stockholders' Equity
                (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                    Accumulated
                                                       Other
                                                    Comprehensive
                   Common Stock  Additional          Income Net      Total
                  Number  Par     Paid-In   Retained     of       Stockholders'
               of Shares  Value   Capital   Earnings   Taxes         Equity
<S>                <C>      <C>     <C>      <C>        <C>       <C>
Balance at 
December 31,1996   18,681   $1,868  $215,091 $124,751   $13,456   $355,166
                 
Year ended 
December 31,1997
 Net income....                                34,360               34,360
 Issuance of Common                                                  
 Stock in 
 connection   
 with acquisition  
 of subsidiary..       85        9     1,942                         1,951
 Issuance of Common                                                  
 Stock in connection                                                    
 with employee                                          
 benefit plans and
 exercise of
 employee stock
 options.......       212       21     3,650                         3,671
 Common Stock            
 repurchases...      (121)     (12)   (2,828)                       (2,840)
 Change in                                                           
 accumulated other                                                      
 comprehensive  
 income, net of
 taxes of $5,595.                                      10,876      10,876
 Common cash         
 dividends 
 ($.22 per share)                              (4,182)             (4,182)
Balance at                                                
December 31,1997  18,857    1,886   217,855   154,929  24,332     399,002      
                                                                       
Nine months ended                                                      
September 30, 1998
(unaudited):
 Net income......                               4,176               4,176
 Issuance of Common                                                  
 Stock in connection 
 with acquisition    
 of subsidiary...     6        6     1,393                          1,399
 Issuance of Common                                                  
 Stock in connection                                                    
 with director 
 and employee benefit   
 plans and exercise
 of employee stock
 options..........   67         7    1,254                         1,261
 Change in                                                           
 accumulated other                                                      
 comprehensive 
 income, net of 
 taxes of $4,890..                                      10,236    10,236
 Common cash  
 dividends 
 ($.24 per share).                             (4,558)            (4,558)
Balance at September  
30, 1998.........$18,991   $1,899 $220,502   $154,547 $ 34,568  $411,516
    
                                  
</TABLE>
                                  
           See notes to consolidated financial statements.
<PAGE>
                MMI Companies, Inc. and Subsidiaries
                Consolidated Statements of Cash Flows
                           (In thousands)
                              Unaudited
<TABLE>
<CAPTION>

                                                      Nine Months
                                                   Ended September 30,       
                                                    1998      1997
<S>                                                 <C>       <C>
OPERATING ACTIVITIES                                      
    Net income..................................  $  4,176    $ 33,670
    Adjustments to reconcile net income to net                    
     cash provided (used) by operating activities:
      Increase in policy liabilities............   101,662       4,678
      Change in reinsurance balances............   (30,286)     28,273    
      Increase in premiums  and fees                         
       receivable...............................   (22,984)    (55,211)
      Change in deferred income taxes...........     2,914        (622)
      Increase in accrued investment                         
       income and other assets..................   (13,352)    (15,372)
      Decrease in accrued expenses and
       other liabilities........................       399      (5,916)
      Net realized gains on investments.........    (1,990)     (1,619)
      Depreciation and amortization on                       
       investments and goodwill.................     5,903       3,679
        Net cash provided (used) by                         
         operating activities...................    46,442      (8,440)
                                                                  
INVESTING ACTIVITIES                                              
    Net sale (purchase) of short-term                             
     investments................................   (9,601)      10,007
    Purchases of available-for-sale                               
     investments................................ (448,549)    (494,137)
    Sales of available-for-sale                                   
     investments................................  365,277      465,756
    Maturities of available-for-sale                              
     investments................................   57,553       41,807
    Acquisitions of subsidiaries................   (2,384)     (17,544)
    Furniture and equipment additions...........   (4,650)      (5,184)
    Net cash provided (used) by investing                         
     activities.................................  (42,354)         705
                                                                  
FINANCING ACTIVITIES                                              
    Issuance of Common Stock....................    1,261        2,060
    Repurchases of Common Stock.................        -       (2,840)
    Proceeds from notes payable.................        -       10,000
    Dividends...................................   (4,558)      (2,670)
    Net cash provided (used) by financing                         
     activities.................................   (3,297)       6,550
                                                                  
      Increase (decrease) in cash...............      791       (1,185)
Cash at beginning of period.....................    6,698        4,839
      Cash at end of period..................... $  7,489     $  3,654
                                                                  
</TABLE>
           See notes to consolidated financial statements.

<PAGE>
                MMI Companies, Inc. and Subsidiaries
             Notes to Consolidated Financial Statements
                          September 30, 1998

1.   Basis of Presentation

     The  accompanying unaudited consolidated financial  statements
  have   been  prepared  in  accordance  with  generally   accepted
  accounting   principles   for  interim   financial   information.
  Accordingly,  they  do  not include all of  the  information  and
  footnotes  required  by generally accepted accounting  principles
  for   complete   financial  statements.   In   the   opinion   of
  management,  all  adjustments  (consisting  of  normal  recurring
  accruals) considered necessary for a fair presentation have  been
  included.   Operating  results for the nine  month  period  ended
  September 30, 1998 are not necessarily indicative of the  results
  that  may be expected for the year ending December 31, 1998.  For
  further   information,   refer  to  the  consolidated   financial
  statements  and  notes  thereto included in  the  Company's  1997
  Annual Report.

2.   Acquisition of Unionamerica Holdings plc

     In  December  1997,  MMI  acquired Unionamerica  Holdings  plc
  (Unionamerica)  in exchange for 7,100,000 shares  of  MMI  Common
  Stock.   The  acquisition  was accounted  for  as  a  pooling  of
  interests   and,   accordingly,  the  accompanying   consolidated
  financial  statements were restated to include  the  consolidated
  operations of Unionamerica for all periods presented.

3.   Earnings Per Share
  
  The  following table sets forth the computation of  net  earnings
  (loss)  per  common share and net earnings (loss) per common  and
  common equivalent share (in thousands, except per share data):
  <TABLE>
  <CAPTION>
                                 Three Months         Nine Months   
                              Ended September 30,   Ended September 30,
                               1998      1997        1998      1997
  <S>                          <C>       <C>         <C>       <C>
  Net earnings (loss).......   $(13,003) $12,230     $ 4,176   $33,670      

  Weighted average number                                              
   of common shares          
   outstanding..............     18,967   18,795      18,918    18,754
                                                                
  Dilutive effect of stock                                            
   options using the 
   treasury stock method....         -       634         491       661
                                                              
  Weighted average number of                                            
   common and common
   equivalent shares    
   outstanding.............      18,967   19,429      19,409    19,415
                                                              
  Net earnings (loss)      
   per common  share.......     $ (.69)  $   .65     $   .22   $  1.80
                                                              
  Net earnings (loss)                                           
   per common and common
   equivalent share........     $ (.69)  $   .63     $   .22   $  1.73
                                                              
</TABLE>
<PAGE>
4.  Trust Preferred Capital Securities

     In  December  1997,  the Company issued $125,000,000  30-year,
  mandatorily  redeemable  preferred  capital  securities  (Capital
  Securities) of MMI Capital Trust I (Trust), a subsidiary of  MMI.
  Proceeds  from the sale of the Capital Securities  were  used  to
  purchase   $125,000,000  aggregate  principal   amount   of   the
  Company's   7-5/8   Junior   Subordinated   Deferrable   Interest
  Debentures  (Debentures), due December 15, 2027.  The  Debentures
  are  the sole assets of the Trust.  The Capital Securities pay  a
  dividend  of  7-5/8% semiannually in arrears  on  June  15th  and
  December  15th.    Payments on the Capital Securities  are  fully
  and  unconditionally  guaranteed by  MMI.   Total  proceeds  were
  $118,700,000,  net  of  expenses.   The  effective  rate  of  the
  Capital Securities is 8.06%.
  
5.   Effect of New Pronouncements

     As  of  January  1,  1998, the Company  adopted  Statement  of
  Financial  Accounting  Standards No. 130 (SFAS  130),  "Reporting
  Comprehensive  Income".  SFAS 130 established new rules  for  the
  reporting   and   display  of  comprehensive   income   and   its
  components.   The  adoption of SFAS 130  had  no  effect  on  the
  Company's net income or loss or stockholders' equity.
     
     The  components of comprehensive income and accumulated  other
  comprehensive income are as follows (in thousands):

     <TABLE>
     <CAPTION>
                           Three Months Ended  Nine Months Ended
                              September 30,      September 30,
                           1998       1997     1998      1997
                                                    
<S>                        <C>        <C>      <C>       <C>
Net income (loss).......   $(13,003)  $12,230  $ 4,176   $33,937
Net change in unrealized                                      
 gains on investments,            
 net of income taxes....      8,827     7,226   10,236     5,922
Comprehensive income  
 (loss).................    $(4,176)  $19,456  $14,412   $39,859
                                                    
                                September 30,      December 31,
                                    1998              1997
Accumulated other                                   
 comprehensive income at
 beginning of year......          $24,332           $13,456
Net change in unrealized                                      
 gains on investments,
 net of income taxes....           10,236            10,876
Accumulated other                                   
 comprehensive income
 at end of period.......          $34,568           $24,332
</TABLE>

    In  1997  the  Financial Accounting Standards Board  (FASB)  also
issued  Statement  of Financial Accounting Standards  No.  131  (SFAS
131),  Disclosures  about  Segments  of  an  Enterprise  and  Related
Information,"  which is effective for years beginning after  December
15,  1997.   SFAS 131 established standards for the way  that  public
business  enterprises report information about operating segments  in
annual  financial  statements and requires those  enterprises  report
selected  information about operating segments in  interim  financial
reports issued to shareholders.

    MMI  Companies has three reportable segments: domestic insurance,
international  insurance  and  consulting  and  fees.   The  domestic
insurance  segment  principally  includes  professional  and  general
liability insurance and reinsurance for hospitals, healthcare systems
and  healthcare  providers.   The  international  insurance  segment,
principally located in the United Kingdom, includes the international
insurance  and reinsurance business.  The consulting and fee  segment
includes  clinical  risk management consulting, strategic  healthcare
consulting,  employee  relations consulting,  professional  liability
claims  administration, healthcare credentials verification  services
and billing, compliance and reimbursement services.

<PAGE>
   Intersegment   revenues   and  expenses  have   been   eliminated.
   Information  by  segment  is  as  follows  (in  thousands,  except
   ratios):
<TABLE>
<CAPTION>
                          Three Months Ended    Nine Months Ended
                             September 30,        September 30,
                            1998      1997       1998     1997
<S>                         <C>       <C>        <C>      <C>
Domestic insurance                                      
segment:
 Revenues..............     $57,971   $53,263    $199,828  $156,487
 Income (loss)                                
  before taxes ........     (16,010)    6,856      (5,213)   19,334

 Loss ratio............      128.7%     82.2%       99.4%     82.2%
 Expense ratio.........       36.2%     32.9%       27.3%     33.4%
 Combined ratio........      164.9%    115.1%      126.7%    115.6%
                                                     
International                                         
insurance segment:
 Revenues..............     $39,825    $27,615   $114,376   $105,095
 Income before taxes...         960      6,725     11,696     19,200
                                                      
 Loss ratio............       74.3%      42.8%      67.0%      56.9%
 Expense ratio.........       44.9%      63.3%      43.1%      45.2%
 Combined ratio........      119.2%     106.1%     110.1%     102.1%
                                                      
Consulting and fee                                    
segment:
 Revenues..............     $11,853    $13,492    $37,226    $38,800
 Income (loss) 
  before taxes .........     (1,527)     1,321     (3,033)     3,685
                                                      
 Pretax margin..........     (12.9%)      9.8%      (8.1%)      9.5%
                                                      
Consolidated insurance                                
ratios:
 Loss ratio.............     105.8%      69.3%      87.5%      71.7%
 Expense ratio..........      39.8%      42.9%      33.1%      38.3%
 Combined ratio.........     145.6%     112.2%     120.6%     110.0%
</TABLE>

   In  June 1998, the FASB issued Statement of Financial Accounting
Standards   No.   133  (SFAS  133).   "Accounting  for   Derivative
Instruments and Hedging Activities," which is effective for  fiscal
years  beginning  after  June  15,  1999.   The  Company  does  not
anticipate  that the adoption of SFAS 133 will have  a  significant
effect on the Company's consolidated operating results or financial
position.

<PAGE>
Item   2.    Management's  Discussion  and  Analysis  of  Financial
Condition and Results of Operations

Results of Operations

   Nine  Months  Ended September 30, 1998 compared to  Nine  Months
Ended September 30, 1997.

    Revenues.  Gross  premiums  written  increased  by   18.2%   to
$362,932,000  for  the nine months ended September  30,  1998  from
$306,948,000  for the 1997 period.  Net premiums written  increased
by 19.6% to $291,396,000 from $243,717,000, and net premiums earned
increased  by  25.8%  to $255,104,000 from $202,753,000.   For  the
three  months  ended  September 30,  1998  gross  premiums  written
increased  by  35.5% to $82,086,000 from $60,559,000, net  premiums
written increased by 41.8% to $66,966,000 from $47,238,000 and  net
premiums earned increased by 29.1% to $77,467,000 from $59,994,000.

   Medical  malpractice  premiums  earned  increased  by  32.7%  to
$152,350,000  for  the nine months ended September  30,  1998  from
$114,789,000  for  the  1997  period  and  increased  by  8.3%   to
$42,114,000  from $38,904,000 for three months ended September  30,
1998  compared  to the prior year.  International  premiums  earned
increased  10.9% to $93,314,000 for the nine months ended September
30,  1998  from $84,132,000 for the 1997 period  and  increased  by
65.6%  to $32,599,000 from $19,684,000 for the three month  period.
Life  and health premiums earned increased by 146.3%, to $9,440,000
for  the  nine months ended September 30, 1998 from $3,832,000  for
the   1997  period  and  increased  by  95.9%  to  $2,754,000  from
$1,406,000  for the three month period.  The Company's written  and
earned premiums can vary significantly from quarter to quarter  due
to  one-time  premiums,  such as for prior acts  coverage  for  new
insureds.   During  the first nine months of  1998,  the  Company's
medical  malpractice premiums earned included $32,118,000  in  such
one  time premiums, an increase of $25,836,000 in one-time premiums
from  the first nine months of 1997.  The increase in international
earned premiums for the three and nine months was primarily due  to
a  downward adjustment made to prior premium estimates in the third
quarter 1997.

   Consulting and fee income decreased 4.1% to $37,226,000 for  the
nine  months ended September 30, 1998 from $38,800,000 for the 1997
period  and decreased by 12.1% to $11,853,000 from $13,492,000  for
the three month period.

  Net  investment income was unchanged at $57,110,000 for the  nine
months  ended  September 30, 1998 compared to $57,215,000  for  the
1997   period  and  decreased  4.3%  to  $19,372,000  compared   to
$20,235,000  for the three month period.   For the three  and  nine
month periods, the Company had net realized gains on investments of
$957,000 and $1,990,000 in 1998 compared to $649,000 and $1,619,000
respectively, in 1997.
  
  Losses   and  expenses.   Losses  and  loss  adjustment  expenses
("LAE")  increased  by 53.6% to $223,293,000 for  the  nine  months
ended September 30, 1998 from $145,343,000 for the 1997 period  and
increased  by 97.2% to $81,981,000 from $41,576,000 for  the  three
month  period.   Medical  malpractice  liability  losses  and   LAE
increased  by  61.9%  to  $153,232,000 for  the  nine  months  from
$94,649,000  for  the  1997  period  and  increased  by  69.6%   to
$55,221,000  from $32,555,000 for the three month  period.  Medical
malpractice  losses  and  LAE increased  due  to  unfavorable  loss
experience  recognized in the third quarter 1998  of  approximately
$17,500,000.   This  charge related to adverse reserve  development
from  two  specific  but  small areas  of  the  Company's  domestic
insurance  operations:  long-term care and  a  disparate  group  of
clinic  clients.  The  increase in medical malpractice  losses  and
LAE  for the nine month period also includes losses related  to  an
increase in one-time premiums in the first quarter 1998 which  were
booked  at  a  higher loss ratio than the core medical  malpractice
business.  International losses and LAE increased 30.7% in the nine
month period to $62,498,000 from $47,836,000 in the 1997 period and
increased  by 187.6% to $24,233,000 from $8,427,000 for  the  three
month  period.   During  the third quarter of  1998,  international
losses and LAE include a $3,300,000 provision for claims related to
asbestos  exposures written in prior years as well as  a  provision
for   claims   of   $1,000,000  related   to   Hurricane   Georges.
International losses and LAE were impacted in the third quarter  of
1997  as  a  result of the revision in premium estimates  discussed
previously.  Life and health losses and LAE increased to $7,563,000
from  $2,858,000 for the nine months.  This increase is due  to  an
increase  in premiums earned in 1998.  The consolidated loss  ratio
increased to 87.5% from 71.7% for the respective nine month periods
and  increased to 105.8% from 69.3% for the three month periods due
to   reserve   strengthening  in  the   medical   malpractice   and
international  lines  of business as well as a  higher  loss  ratio
associated with the one-time premiums.

  
  
  
  <PAGE>
  Insurance  and  administrative  expenses  increased  by  8.3%  to
$117,299,000  for  the nine months ended September  30,  1998  from
$108,297,000  for  the  1997  period  and  increased  by  15.1%  to
$41,754,000  from  $36,284,000 for the three month  period.    This
increase  is  principally due to increased  acquisition  costs  and
taxes  related to higher levels of premiums in the current year  as
well as higher expenses related to the consulting segment.
  
  Interest  expense increased by 63.3% to $7,388,000 for  the  nine
months  ended  September  30, 1998 from $4,523,000   for  the  1997
period and increased by 55.0% to $2,491,000 from $1,607,000 for the
three month period, due to an increase in debt outstanding as  well
as  an increase in the interest rate on the debt.  Debt outstanding
totaled $118,778,000 at September 30, 1998 compared to $118,724,000
at December 31, 1997 and $103,000,000 at  September 30, 1997.

  Income  taxes.   The  Company recorded an income  tax  credit  of
$726,000 for the nine months ended September 30, 1998 compared to a
provision  of  $8,287,000  for the 1997 period and  for  the  three
month period recorded a credit of $3,574,000 in 1998 compared to  a
provision  of $2,673,000 in the prior year.  Income taxes decreased
for  the  three and nine months due to a pre-tax loss in the  third
quarter  and  lower pre-tax income for the nine months compared  to
the prior year.

   Net income.  Net income decreased by 87.6% to $4,176,000 for the
nine  months ended September 30, 1998 from $33,670,000 for the 1997
period  and  decreased to a net loss of $13,003,000  in  the  third
quarter of 1998 compared to net income of $12,230,000 in 1997.  The
decrease  in net income is principally a result of adverse  reserve
development from the medical malpractice and international lines of
business recorded in the third quarter 1998.

   Net  income per share.  Diluted net income per common and common
equivalent  share  decreased to $.22  for  the  nine  months  ended
September  30, 1998 from $1.73 for the 1997 period.  For the  three
months  ended September 30, diluted net loss per share was $.69  in
1998 compared to net income per share of $.63 in 1997.


Liquidity And Capital Resources

  As  a holding company, the Company's assets consist primarily  of
the  stock of its subsidiaries.  The principal sources of funds are
management fees and dividends from subsidiaries.  In the nine month
periods  ended  September  30, 1998 and  September  30,  1997,  the
Company   received   dividends   of  $4,500,000   and   $8,250,000,
respectively,   from  its  subsidiaries.   The   Company   received
management fees from its subsidiaries of $18,038,000 for  the  nine
months ended September 30, 1998, compared to $20,413,000 in 1997.

  On  a  consolidated  basis, the Company's  principal  sources  of
operating  funds  are  premiums, net investment  income,  fees  and
recoveries  from  reinsurers.   Funds  are  used  to  pay   claims,
operating  expenses,  reinsurance  premiums,  acquisition   related
expenses,  debt  service  requirements,  taxes  and  dividends   to
stockholders.

  Cash  provided  by operating activities was $46,442,000  for  the
nine  months  ended September 30, 1998 compared with cash  used  of
$8,440,000 for the nine months ended September 30, 1997. Because of
variability related to the amount and timing of payment  of  claims
and  collection  of premiums and fees, cash from operations  for  a
casualty  insurance company can vary substantially from quarter  to
quarter.

  Cash  used by investing activities was $42,354,000 for  the  nine
months  ended  September  30, 1998 compared  to  cash  provided  of
$705,000 for the nine months ended September 30, 1997.

    Cash  used by financing activities was $3,297,000 for the  nine
months  ended  September  30, 1998 compared  to  cash  provided  of
$6,550,000 for the nine months ended September 30, 1997.

   The  Company invests primarily in investment grade fixed  income
securities and also preferred stocks.  The estimated fair value  of
preferred stocks was 4.5% of fair value of total invested assets as
of  September  30 1998. The estimated fair value of  the  Company's
investment  portfolio was $1,284,273,000 as of September  30,  1998
compared  to $1,230,800,000 as of December 31, 1997.  The September
30,  1998 amount includes net unrealized gains of $52,270,000 which
represents  the  amount by which the estimated fair  value  of  the
investment portfolio exceeds amortized cost.  Net unrealized  gains
as of December 31, 1997 were $37,144,000.  The Company maintains  a
portion  of  its  investment portfolio in high quality,  short-term
securities to meet its short-term operating liquidity requirements,
including the payment of claims and expenses.

<PAGE>
Short-term  investments totaled $61,613,000  or  4.8%  of  invested
assets at September 30, 1998.  The Company believes that all of its
invested assets are readily marketable.

    Long-term   debt  consisting  of  Capital  Securities   totaled
$118,778,000  at September 30, 1998.  This amount  relates  to  the
Company's  $125,000,000 of 30-year, non-callable Capital Securities
issued in December, 1997.

  Stockholders'  equity was $411,516,000 as of September  30,  1998
compared  to  $399,002,000 as of December 31,  1997.  Dividends  to
stockholders  were $4,558,000 for the nine months  ended  September
30, 1998.

Year 2000

  The Company has implemented an enterprise-wide plan to address Year
2000 ("Y2K") issues across all of its technology platforms as well as
to reasonably assure that its critical business partners are prepared
for business continuity.

   The  phases  of  the  Company's work  plan  are  assessment,  role
definitions,   inventory   and   analysis,   coding,   testing    and
implementation/confirmation. The majority of system modifications and
conversions have been completed.  The Company is working closely with
its business partners and suppliers to ensure alignment in addressing
the Y2K issue.

   MMI has completed the modifications, testing and implementation of
its  main  insurance and financial systems, making these applications
Y2K   compliant.   Additionally,  system-wide  Y2K  simulations   are
scheduled  throughout  1999.   The cost  to  address  Y2K  issues  is
expected to be less than $600,000, and is being expensed as incurred.
Costs associated with Year 2000 were $150,000 in the third quarter of
1998 and have totaled $425,000 to date.

     A.   State of Readiness:
          
          The  Company has thoroughly completed the assessment,  role
          definition   and  inventory  and  analysis   phases   which
          encompass  hardware, software (third party  and  internally
          developed), embedded technologies, and non-IT systems.
          
          The  majority  of identified critical internally  developed
          information  technologies (IT) have been  modified,  tested
          and  implemented.  The remaining systems are scheduled  for
          testing  or  implementation during the  fourth  quarter  of
          1998.
          
          The Company is addressing Y2K compliance of third party  IT
          vendors through a combination of written correspondence and
          internal  testing. All identified critical third  party  IT
          vendors   have  been  contacted  and  asked   to   document
          compliance.   All  Y2K compliance by material  third  party
          vendors  has  been  either  internally  tested  by  MMI  or
          documented  by the third party.  MMI is currently  planning
          the implementation for any necessary modifications based on
          vendor comments.
          
          The  Company has contacted related non-IT parties to ensure
          Y2K  compliance.   The Company believes failure  of  non-IT
          systems  would not have a material effect on the  Company's
          operations.
     
     B.   Material Third Party Relationships:
     
          The  Company  relies  on  continued  normal  operations  of
          entities such as brokers, reinsurers, banks, money managers
          and  benefit  plan  administrators.   Diligent  action   is
          underway  to ensure alignment with these business partners,
          even though disruption relating to these institutions would
          not  have  a  material  effect on operations  or  financial
          performance.

     C.   Contingency Plans:
     
          MMI  plans  to  leverage existing disaster  recovery  plans
          relating to technology and business continuity.  Both  sets
          of  plans  will be reviewed in 1999 as to their application
          to the Y2K issue.
     

<PAGE>
     D.   Other:
     
          MMI   has   conducted  a  comprehensive   review   of   its
          underwriting   guidelines  and  will,  where   appropriate,
          exclude  Y2K exposures. MMI believes, as a basic  principle
          of  insurance, that non-fortuitous losses are  not  covered
          under  its  policies  of  insurance even  without  specific
          exclusions.   With   respect  to  its  domestic   insurance
          operations, if underwriting reveals an acceptable risk,  an
          endorsement will be attached that affirmatively grants  Y2K
          coverage under the professional liability coverage part and
          excludes  Y2K  under the general liability  coverage  part.
          With  respect  to reinsurance contracts, it is  unusual  to
          apply  specific Y2K exclusions to these contracts and there
          may or may not be such exclusions in the original policies,
          depending  on  exposure, class of service or industry,  and
          original  coverage.  For these reasons, MMI  believes  that
          its  exposure  to  Y2K  claims is not  material.   However,
          because  of  lack of legal precedent, it is  impossible  to
          predict  what,  if  any, exposure insurance  companies  may
          ultimately  have  for Y2K claims whether coverage  for  the
          issue is specifically excluded or included.

     E.   Forward-Looking Information

          Certain  matters  referred to above regarding  Y2K  contain
          forward-looking   statements   that   involve   risks   and
          uncertainties.    In  particular,  the   general   business
          community's  readiness  for  the  Y2K  and  the   Company's
          potential underwriting exposure to Y2K claims are difficult
          to  predict.  To that extent, MMI claims the protection  of
          the  disclosure  liability safe harbor for  forward-looking
          statements  contained in the Private Securities  Litigation
          Reform Act of 1995.
          
          


                   PART II.  OTHER INFORMATION

Item 5.  Other Information

 As of September 24, 1998, the Company and the Rights Agent amended
and  restated the Shareholder Rights Plan to (i) eliminate the term
"Continuing  Directors"  and  all provisions  which  required  that
certain  actions  be taken only by Continuing Directors,  and  (ii)
delete  Section 23 (c) which provided that the Rights  may  not  be
redeemed for 180 days following a change in a majority of the Board
either by election in which such majority was not nominated by  the
Board, or by a consent solicitation.

  On  November  5,  1998, the Company issued  a  news  announcement
reporting a net loss per share for the third quarter, 1998 of $0.67.   
The Company subsequently revised the number of anti-dilutive common
stock  equivalents which  resulted in a net loss per share of $0.69 
for the third quarter.  



Item 6.  Exhibits and Reports on Form 8-K

  A.    Exhibits

     4.2   Amended  and  Restated  Rights Agreement  dated  as  of
           September  24,  1998  between MMI  Companies,  Inc.  and
           ChaseMellon  Shareholder Services  L.L.C.  (Incorporated
           by  reference  to  Exhibit 99.1 to MMI  Companies,  Inc.
           Amendment No. 1 to Form 8-A filed November 6, 1998.)
     
     27.   Financial Data Schedule.
     

  B.     Reports  on Form 8-K.  No reports on Form 8-K  were  filed
         during the quarter.



<PAGE>

                            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.


                                        MMI Companies,Inc.
                                        (Registrant)



Date: November 12, 1998                 /s/B. Frederick Becker
                                        B. Frederick Becker
                                        Chairman and Chief
                                        Executive Officer



Date: November 12, 1998                 /s/Paul M. Orzech
                                        Paul M. Orzech
                                        Executive Vice President and
                                        Chief Financial Officer