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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “accelerated filer,” “large accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). YES ¨ NO x.

As of ~~November~~May 1, ~~2012,~~2013, the Registrant had 995,253 common shares, $1.00 par value per share, outstanding.

Certain statements contained in this Form 10-Q, or otherwise made by our officers, including statements related to our future performance, our outlook for our businesses and respective markets, projections, statements of our management’s plans or objectives, forecasts of market trends and other matters, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and contain information relating to us that is based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. The words “expect,” “believe,” “may,” “could,” “should,” “would,” “estimate,” “anticipate,” “intend,” “plan,” “target,” “goal” and similar expressions as they relate to us or our management are intended to identify forward-looking statements. Such statements reflect our management’s current views with respect to future events and are subject to certain risks, uncertainties and assumptions that could cause actual results to differ materially from those reflected in any forward-looking statements. Our actual future results may differ materially from those set forth in our forward-looking statements. Factors that might cause such actual results to differ materially from those reflected in any forward-looking statements include, but are not limited to the factors discussed in detail in Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in this Form 10-Q, as well as:

The foregoing review of important factors should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our management’s analysis only as of the date they are made. We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.


	As of September 30, 2012			As of December 31, 2011			As of March 31, 2013			As of December 31, 2012
ASSETS
INVESTMENTS
Fixed maturity investments, available for sale, at fair value (amortized cost $7,853,501 and $9,914,515)	$	8,222,018		$	10,448,847
Equity securities, available for sale, at fair value (cost $7,212,486 and $7,574,686)		12,840,652			12,296,703
Fixed maturity investments, available for sale, at fair value (amortized cost $7,583,013 and $7,340,536)							$	7,942,088		$	7,665,482
Equity securities, available for sale, at fair value (cost $7,004,516 and $7,119,690)								12,898,446			12,583,820

TOTAL INVESTMENTS		21,062,670			22,745,550			20,840,534			20,249,302
Cash and cash equivalents		1,002,060			904,485			869,385			1,034,485
Restricted cash and cash equivalents		2,318,808			435,924			1,136,771			1,349,744
Other invested assets								1,470,000			1,470,000
Assumed reinsurance balances receivable		283,775			183,518			368,171			274,526
Accrued investment income		88,599			94,539			82,369			77,620
Property and equipment		599,418			745,784			543,307			589,296
Deferred policy acquisition costs		251,294			146,226			362,808			268,643
Prepaid expenses and other assets		269,316			378,257			399,220			412,065

TOTAL ASSETS	$	25,875,940		$	25,634,283		$	26,072,565		$	25,725,681

LIABILITIES AND SHAREHOLDERS’ EQUITY
LIABILITIES
Unpaid losses and loss adjustment expenses	$	1,489,900		$	1,043,443		$	1,571,275		$	1,408,190
Unearned premium		679,144			392,595			980,565			726,044
Assumed reinsurance balances payable		—			86,685			15,665			178,880
Accrued expenses and other liabilities		1,144,699			1,396,332			1,167,175			1,490,727

TOTAL LIABILITIES	$	3,313,743		$	2,919,055		$	3,734,680		$	3,803,841

SHAREHOLDERS’ EQUITY
Common shares, $1 par value, 2012 and 2011: 2,000,000 shares authorized, 995,253 issued and outstanding	$	995,253		$	995,253
Common shares, $1 par value, 2013 and 2012: 2,000,000 shares authorized, 995,253 issued and outstanding							$	995,253		$	995,253
Additional paid-in capital		6,287,293			6,287,293			6,287,293			6,287,293
Retained earnings		16,413,168			17,411,533			16,301,564			16,349,448
Accumulated other comprehensive income		5,996,683			5,256,349			6,253,005			5,789,076
Shares held by Subsidiary (308,560 and 311,633 shares) at cost		(7,130,200	)		(7,235,200	)
Shares held by Subsidiary (319,835 and 319,835 shares) at cost								(7,499,230	)		(7,499,230	)

TOTAL SHAREHOLDERS’ EQUITY		22,562,197			22,715,228			22,337,885			21,921,840

TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	25,875,940		$	25,634,283		$	26,072,565		$	25,725,681

See the accompanying notes to the unaudited condensed consolidated financial statements.


	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011			Three Months Ended September 30, 2012			Three Months Ended September 30, 2011			Three Months Ended March 31, 2013			Three Months Ended March 31, 2012
REVENUE
Net premiums earned	$	878,616		$	221,844		$	425,344		$	96,283		$	329,876		$	176,821
Commission income		615,239			235,874			209,663			91,529			303,562			214,944
Other income		98,156			—			—			—			—			98,156
Net investment income		299,256			308,953			92,136			96,128			65,292			95,266
Net realized gain on investments		1,106,299			1,400,792			494,271			84,653			760,702			609,093

TOTAL REVENUE		2,997,566			2,167,463			1,221,414			368,593			1,459,432			1,194,280

LOSSES AND EXPENSES
Losses and loss adjustment expenses (recoveries)		526,614			(170,078	)		243,319			(248,544	)
Losses and loss adjustment expenses														206,173			110,514
Policy acquisition costs		313,073			85,818			144,406			38,482			122,061			65,424
Operating and management expenses		2,828,252			3,179,022			884,915			911,864			1,010,228			935,954

TOTAL LOSSES AND EXPENSES		3,667,939			3,094,762			1,272,640			701,802			1,338,462			1,111,892

NET LOSS BEFORE TAX		(670,373	)		(927,299	)		(51,226	)		(333,209	)
NET INCOME BEFORE TAX													$	120,970		$	82,388

Income tax expense		—			—			—			—			—			—
NET INCOME AFTER TAX													$	120,970		$	82,388
OTHER COMPREHENSIVE INCOME
Net unrealized holding gains arising during the period														1,224,631			1,320,606
Reclassification adjustment for gains included in net income														(760,702	)		(609,093	)

NET LOSS AFTER TAX	$	(670,373	)	$	(927,299	)	$	(51,226	)	$	(333,209	)
OTHER COMPREHENSIVE INCOME														463,929			711,513

OTHER COMPREHENSIVE INCOME (LOSS)
Net unrealized holding gain (loss) arising during the period		1,846,633			(696,544	)		864,033			(1,740,737	)
Reclassification adjustment for (gain) included in net (loss)		(1,106,299	)		(1,400,792	)		(494,271	)		(84,653	)

OTHER COMPREHENSIVE INCOME (LOSS)		740,334			(2,097,336	)		369,762			(1,825,390	)

COMPREHENSIVE INCOME (LOSS)	$	69,961		$	(3,024,635	)	$	318,536		$	(2,158,599	)
COMPREHENSIVE INCOME													$	584,899		$	793,901

RETAINED EARNINGS, BEGINNING OF PERIOD	$	17,411,533		$	19,096,686		$	16,636,066		$	18,213,418		$	16,349,448		$	17,411,533
Net loss		(670,373	)		(927,299	)		(51,226	)		(333,209	)
Net income														120,970			82,388
Dividends		(327,992	)		(615,993	)		(171,672	)		(326,815	)		(168,854	)		(156,320	)

RETAINED EARNINGS, END OF PERIOD	$	16,413,168		$	17,553,394		$	16,413,168		$	17,553,394			16,301,564			17,337,601

Per share amounts
Basic and diluted loss	$	(0.98	)	$	(1.33	)	$	(0.07	)	$	(0.48	)
Basic and diluted income per share													$	0.18		$	0.12

Dividends	$	0.50		$	0.94		$	0.25		$	0.47		$	0.25		$	0.25

Weighted average number of shares outstanding for the entire period (for basic and diluted)		685,157			697,361			686,693			695,350
Weighted average number of shares outstanding for the entire period														675,418			689,485

See the accompanying notes to the unaudited condensed consolidated financial statements.


	Nine Months Ended September 30, 2012			Nine Months Ended September 30, 2011			Three Months Ended March 31, 2013			Three Months Ended March 31, 2012
OPERATING ACTIVITIES
Net Cash used in Operating Activities	$	(1,198,510	)	$	(2,671,669	)	$	(831,964	)	$	(628,148	)

INVESTING ACTIVITIES
Movement in restricted cash and cash equivalents		(1,882,884	)		29,137			212,973			155,506
Purchases of property and equipment		—			(78,343	)		(3,132	)		—
Purchases of available-for-sale securities		(2,689,710	)		(1,562,478	)		(1,086,822	)		(822,467	)
Proceeds from sales of available-for-sale securities		4,996,671			4,338,292			1,462,699			1,284,200
Proceeds from redemptions of fixed maturity investments		1,000,000			—
Proceeds from maturities of fixed maturity investments		200,000			500,000			250,000			200,000

Net Cash provided by Investing Activities		1,624,077			3,226,608			835,718			817,239

FINANCING ACTIVITIES
Purchase of shares by subsidiary, net		—			(148,409	)
Dividends paid		(327,992	)		(289,178	)		(168,854	)		(156,320	)

Net Cash used in Financing Activities		(327,992	)		(437,587	)		(168,854	)		(156,320	)

NET INCREASE IN CASH AND CASH EQUIVALENTS		97,575			117,352
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS								(165,100	)		32,771
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	$	904,485		$	970,697		$	1,034,485		$	904,485

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	1,002,060		$	1,088,049		$	869,385		$	937,256

See the accompanying notes to the unaudited condensed consolidated financial statements.

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 ~~(“SEC” or the~~(the “Commission”), and reflect all adjustments consisting of normal recurring accruals, which are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations as of the end of and for the periods presented. All intercompany transactions and balances have been eliminated on consolidation. 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. In these notes, the terms “we”, “us”, “our” or the “Company” refer to AmerInst and its subsidiaries. These condensed statements should be read in conjunction with the audited consolidated financial statements at and for the year ended December 31, ~~2011~~2012 and notes thereto, included in AmerInst’s Annual Report on Form 10-K for the year then ended.

In ~~May~~December 2011, the Financial Accounting Standards Board (“FASB”) issued amendments to disclosure requirements for common fair value measurement. These amendments, effective for the interim and annual periods beginning on or after December 15, 2011 (early adoption is prohibited), resulted in a common definition of fair value and common requirements for measurement and disclosure under accounting principles generally accepted in the United States of America (“U.S. GAAP”) and International Financial Reporting Standards (“IFRS”). Consequently, the amendments have changed some fair value measurement principles and disclosure requirements. The implementation of this amended accounting guidance has not had a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued new guidance revising the manner in which entities present comprehensive income in their financial statements. The option to report other comprehensive income and its components in the statement of changes in shareholders’ equity is eliminated. Components of comprehensive income may be reported in either (1) a continuous statement of comprehensive income or (2) two separate but consecutive statements. The new requirements were effective for the interim and annual periods beginning on or after December 15, 2011 and require retrospective application; early adoption was permitted. As the new guidance does not change the items that constitute net income and/or other comprehensive income, the timing of reclassifications from other comprehensive income to net income or the earnings per share computation, the adoption of this guidance has not impacted our results of operations, financial condition or liquidity.

~~In December 2011, the FASB~~ issued Accounting Standards Update No. 2011-11, “Disclosures about Offsetting Assets and Liabilities” (“ASU 2011-11”). The objective of ASU 2011-11 iswas to enhance disclosures by requiring improved information about financial instruments and derivative instruments in relation to netting arrangements. ASU 2011-11 iswas effective for interim and annual periods beginning on or after January 1, 2013. ~~The Company is currently evaluating~~As the ~~impact of this guidance; however, since this update~~new guidance affects disclosures only, ~~it is~~its adoption did not ~~expected to~~ have a material impact on the Company’s consolidated financial statements.

The Company has determined that all ~~other~~ recently issued accounting pronouncements do not apply to its operations.

The cost or amortized cost, gross unrealized holding gains and losses, and estimated fair value of the Company’s fixed maturity investments, by major security type, and equity securities as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012 are as follows:


	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
As of September 30, 2012
As of March 31, 2013
Fixed maturity investments:
U.S. government agency securities	$	446,591	$	18,466	$	—		$	465,057	$	446,837	$	19,611	$	—		$	466,448
Obligations of states and political subdivisions		7,078,407		345,447		(13,252	)		7,410,602		6,810,744		325,018		(4,510	)		7,131,252
Corporate debt securities		328,503		17,856		—			346,359		325,432		18,956		—			344,388

Total fixed maturity investments		7,853,501		381,769		(13,252	)		8,222,018		7,583,013		363,585		(4,510	)		7,942,088

Equity securities*		6,212,486		5,181,647		—			11,394,133		6,004,516		5,370,495		—			11,375,011
Hedge fund		1,000,000		446,519		—			1,446,519		1,000,000		523,435		—			1,523,435

Total equity securities		7,212,486		5,628,166		—			12,840,652		7,004,516		5,893,930		—			12,898,446

Total investments	$	15,065,987	$	6,009,935	$	(13,252	)	$	21,062,670	$	14,587,529	$	6,257,515	$	(4,510	)	$	20,840,534


	Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value		Cost or Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
As of December 31, 2011
As of December 31, 2012
Fixed maturity investments:
U.S. government agency securities	$	1,446,223	$	7,882	$	—		$	1,454,105	$	446,713	$	19,644	$	—		$	466,357
Obligations of states and political subdivisions		8,135,268		531,523		(1,257	)		8,665,534		6,566,849		302,324		(14,604	)		6,854,569
Corporate debt securities		333,024		—		(3,816	)		329,208		326,974		17,582		—			344,556

Total fixed maturity investments		9,914,515		539,405		(5,073	)		10,448,847		7,340,536		339,550		(14,604	)		7,665,482

Equity securities*		6,574,686		4,360,802		(34,718	)		10,900,770		6,119,690		4,981,815		(2,836	)		11,098,669
Hedge fund		1,000,000		395,933		—			1,395,933		1,000,000		485,151		—			1,485,151

Total equity securities		7,574,686		4,756,735		(34,718	)		12,296,703		7,119,690		5,466,966		(2,836	)		12,583,820

Total investments	$	17,489,201	$	5,296,140	$	(39,791	)	$	22,745,550	$	14,460,226	$	5,806,516	$	(17,440	)	$	20,249,302

The following tables summarize the Company’s fixed maturity and equity securities in an unrealized loss position and the aggregate fair value and gross unrealized loss by length of time the security has continuously been in an unrealized loss position:


	12 months or greater				Less than 12 months					Total					12 months or greater				Less than 12 months					Total
	Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses		Estimated Fair Value		Unrealized Losses			Estimated Fair Value		Unrealized Losses
As of December 31, 2011
As of December 31, 2012
Fixed maturity investments:
U.S. government agency securities	$	—	$	—	$	—	$	—		$	—	$	—		$	—	$	—	$	—	$	—		$	—	$	—
Obligations of states and political subdivisions		—		—		200,046		(1,257	)		200,046		(1,257	)		—		—		660,084		(14,604	)		660,084		(14,604	)
Corporate debt securities		—		—		329,208		(3,816	)		329,208		(3,816	)		—		—		—		—			—		—

Total fixed maturity investments		—		—		529,254		(5,073	)		529,254		(5,073	)		—		—		660,084		(14,604	)		660,084		(14,604	)

Equity securities		—		—		864,871		(34,718	)		864,871		(34,718	)		—		—		45,526		(2,836	)		45,526		(2,836	)
Hedge fund		—		—		—		—			—		—			—		—		—		—			—		—

Total equity securities		—		—		864,871		(34,718	)		864,871		(34,718	)		—		—		45,526		(2,836	)		45,526		(2,836	)

Total investments	$	—	$	—	$	1,394,125	$	(39,791	)	$	1,394,125	$	(39,791	)	$	—	$	—	$	705,610	$	(17,440	)	$	705,610	$	(17,440	)

As of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011,~~2012, there were two and four securities in an unrealized loss position with an estimated fair value of ~~$1,168,797~~$727,990 and ~~$1,394,125,~~$705,610, respectively. Of these securities, none had been in an unrealized loss position for 12 months or greater. As of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011,~~2012, none of these securities were considered to be other-than-temporarily impaired. The Company has no intent to sell and it is not more likely than not that the Company will be required to sell these securities before their fair values recover above the adjusted cost. The unrealized losses from these securities were not as a result of credit, collateral or structural issues.

At March 31, 2013 and December 31, 2012, the Company had investments in certificates of deposit (“CD”) in the amount of $1,470,000 comprising of fully insured time deposits placed with Federal Deposit Insurance Corporation (“FDIC”) insured commercial banks and savings associations. The FDIC, an independent agency of the United States government, protects depositors up to an amount of $250,000 per depositor, per insured institution. FDIC insurance is backed by the full faith and credit of the United States government. The stated interest rate of an FDIC insured CD varies greatly among commercial banks and savings associations, depending on the term of the CD and the institution’s need for funding. The liquidity of “marketable” CDs is marginal, even though they are assigned an FDIC number, a CUSIP number and are held in book-entry form through the Depository Trust Company. Depending on market liquidity and conditions, the bid price for an FDIC insured CD would reflect the supply of and the demand for deposits of the particular bank or savings association, as well as prevailing interest rates, the remaining term of the deposit, specific features of the CD, and compensation of the broker arranging the sale of the CD. These time deposits have maturities ranging from two to five years and are classified as other invested assets on the Company’s consolidated balance sheet.

The Company assesses whether declines in the fair value of its fixed maturity investments classified as available-for-sale represent impairments that are other-than-temporary by reviewing each fixed maturity investment that is impaired and (1) determining if the Company has the intent to sell the fixed maturity investment or if it is more likely than not that the Company will be required to sell the fixed maturity investment before its anticipated recovery; and (2) assessing whether a credit loss exists, that is, where the Company expects that the present value of the cash flows expected to be collected from the fixed maturity investment are less than the amortized cost basis of the investment.

The Company had no planned sales of its fixed maturity investments classified as available-for-sale that were in an unrealized loss position at ~~September 30, 2012.~~March 31, 2013. In assessing whether it is more likely than not that the Company will be required to sell a fixed maturity investment before its anticipated recovery, the Company considers various factors including its future cash flow requirements, legal and regulatory requirements, the level of its cash, cash equivalents, short term investments and fixed maturity investments available for sale in an unrealized gain position, and other relevant factors. For the ~~nine~~three months ended ~~September 30, 2012,~~March 31, 2013, the Company did not recognize any other-than-temporary impairments due to required sales.

In evaluating credit losses, the Company considers a variety of factors in the assessment of a fixed maturity investment including: (1) the time period during which there has been a significant decline below cost; (2) the extent of the decline below cost and par; (3) the potential for the fixed maturity investment to recover in value; (4) an analysis of the financial condition of the issuer; (5) the rating of the issuer; and (6) failure of the issuer of the fixed maturity investment to make scheduled interest or principal payments.

If we conclude a security is other-than-temporarily impaired, we write down the amortized cost of the security to fair value, with a charge to net realized investment gains (losses) in the Consolidated Statement of Operations. Gross unrealized losses on the investment portfolio as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011,~~2012, relating to ~~four~~two and ~~two~~three fixed maturity securities and none and ~~two~~one equity ~~securities,~~security, amounted to ~~$13,252~~$4,510 and ~~$39,791,~~$17,440, respectively. This decrease was attributable to ~~equity~~the increase in the fair value of certain fixed maturity securities ~~which we determined were not other than temporarily impaired based on~~as a result of a strong performance in the ~~process described above.~~bond market during the quarter. The unrealized losses on these available for sale fixed maturity securities were not as a result of credit, collateral or structural issues. During the ~~nine months~~quarters ended March 31, 2013 and ~~three months ended September 30,~~ 2012, the Company recorded a total other-than-temporary impairment charge of ~~$198,579~~$81,154 and ~~$32,968~~$64,189, respectively, on ~~three equity securities and~~ one equity security, respectively, as a result of the decline in fair value below cost. During the nine months and three months ended September 30, 2011, the Company recorded a total other-than-temporary impairment charge of $152,450 on two equity securities, as a result of the decline in fair value below cost.

Under existing U.S. GAAP, we are required to recognize certain assets at their fair value in our consolidated balance sheets. This includes our fixed maturity investments and equity securities. In accordance with the Fair Value Measurements and Disclosures Topic of FASB’s Accounting Standards Codification (“ASC”) 820, fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy is based upon whether the inputs to the valuation of an asset or liability are observable or unobservable in the market at the measurement date, with quoted market prices being the highest level (Level 1) and unobservable inputs being the lowest level (Level 3). A fair value measurement will fall within the level of the hierarchy based on the input that is significant to determining such measurement. The three levels are defined as follows:

At each measurement date, we estimate the fair value of the security using various valuation techniques. We utilize, to the extent available, quoted market prices in active markets or observable market inputs in estimating the fair value of our investments. When quoted market prices or observable market inputs are not available, we utilize valuation techniques that rely on unobservable inputs to estimate the fair value of investments. The following describes the valuation techniques we used to determine the fair value of investments held as of ~~September 30, 2012~~March 31, 2013 and what level within the fair value hierarchy each valuation technique resides:

While we obtain pricing from independent pricing services, management is ultimately responsible for determining the fair value measurements for all securities. To ~~validate~~ensure fair value measurement is applied consistently and in accordance with U.S. GAAP, we periodically update our understanding of the pricing methodologies used by the independent pricing services. We also challenge any prices we ~~complete quantitative analyses to compare the performance~~believe may not be representative of fair value under current market conditions. Our review process includes, but is not limited to: (i) initial and ongoing evaluation of the ~~above investments~~pricing methodologies and valuation models used by outside parties to calculate fair value; (ii) quantitative analysis; (iii) a review of multiple quotes obtained in the pricing process and the range of resulting fair values for each security, if available, and (iv) randomly selecting purchased or sold securities and comparing the executed prices to the ~~performance of appropriate benchmarks, with significant differences identified and investigated.~~fair value estimates provided by the independent pricing sources.

There have been no material changes to ~~any of~~ our valuation techniques from what was used as of December 31, ~~2011.~~2012. Since the fair value of a security is an estimate of what a willing buyer would pay for our asset if we sold it, we will not know the ultimate value of our securities until they are sold. We believe the valuation techniques utilized provide us with a reasonable estimate of the price that would be received to sell our assets or transfer our liabilities in an orderly market transaction between participants at the measurement date. The following tables show the fair value of the Company’s investments in accordance with ASC 820 as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011:~~2012:


					Fair value measurement using:										Fair value measurement using:
	Carrying amount		Total fair value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)		Carrying amount		Total fair value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
As of September 30, 2012
As of March 31, 2013
U.S. government agency securities	$	465,057	$	465,057	$	—	$	465,057	$	—	$	466,448	$	466,448	$	—	$	466,448	$	—
Obligations of state and political subdivisions		7,410,602		7,410,602				7,410,602				7,131,252		7,131,252				7,131,252
Corporate debt securities		346,359		346,359				346,359				344,388		344,388				344,388

Total fixed maturity investments		8,222,018		8,222,018								7,942,088		7,942,088

Equity securities (excluding the hedge fund)		11,394,133		11,394,133		11,394,133						11,375,011		11,375,011		11,375,011
Hedge fund		1,446,519		1,446,519						1,446,519		1,523,435		1,523,435						1,523,435

Total equity securities		12,840,652		12,840,652								12,898,446		12,898,446

Total investments	$	21,062,670	$	21,062,670	$	11,394,133	$	8,222,018	$	1,446,519	$	20,840,534	$	20,840,534	$	11,375,011	$	7,942,088	$	1,523,435


					Fair value measurement using:
	Carrying amount		Total fair value		Quoted prices in active markets (Level 1)		Significant other observable inputs (Level 2)		Significant unobservable inputs (Level 3)
As of December 31, 2011
U.S. government agency securities	$	1,454,105	$	1,454,105	$	—	$	1,454,105	$	—
Obligations of state and political subdivisions		8,665,534		8,665,534				8,665,534
Corporate debt securities		329,208		329,208				329,208

Total fixed maturity investments		10,448,847		10,448,847

Equity securities (excluding the hedge fund)		10,900,770		10,900,770		10,900,770
Hedge fund		1,395,933		1,395,933						1,395,933

Total equity securities		12,296,703		12,296,703

Total investments	$	22,745,550	$	22,745,550	$	10,900,770	$	10,448,847	$	1,395,933

There were no transfers between Levels 1 and 2 during the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 and the year ended December 31, ~~2011.~~

The following table presents a reconciliation of the beginning and ending balance of investments measured at fair value on a recurring basis using significant unobservable (Level 3) inputs for the nine months ended September 30, 2012 and 2011:

~~There were no transfers into or from the Level 3 category during the nine months ended September 30, 2012 and 2011.~~2012.


	Hedge Fund Investment Three Months ended					Hedge Fund Investment Three Months ended
	September 30, 2012		September 30, 2011			March 31, 2013		March 31, 2012
Balance classified as Level 3, beginning of period	$	1,432,621	$	1,506,409		$	1,485,151	$	1,395,933
Total gains or losses included in earnings:		—		—			—		—
Net realized gains		—		—			—		—
Change in fair value of hedge fund investment		13,898		(68,743	)		38,284		58,368
Purchases		—		—			—		—
Sales		—		—			—		—
Transfers in and/or out of Level 3		—		—			—		—

Ending balance, end of period	$	1,446,519	$	1,437,666		$	1,523,435	$	1,454,301

There were no transfers into or from the Level 3 category during the three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011.~~2012.

The cost or amortized cost and estimated fair value of fixed maturity investments as of ~~September 30, 2012~~March 31, 2013 and December 31, ~~2011~~2012 by contractual maturity are shown below. Expected maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations without penalties.


	Amortized Cost		Estimated Fair Value		Amortized Cost		Estimated Fair Value
As of September 30, 2012
March 31, 2013
Due in one year or less	$	1,587,212	$	1,610,417	$	830,360	$	835,324
Due after one year through five years		3,413,787		3,629,319		3,406,727		3,598,381
Due after five years through ten years		2,852,502		2,982,282		3,156,998		3,314,491
Due after ten years		—		—		188,928		193,892

Total	$	7,853,501	$	8,222,018	$	7,583,013	$	7,942,088

~~Information on sales and maturities of investments during the nine months ended September 30, 2012 and 2011 are as follows:~~

Information on sales and maturities of investments during the three months ended ~~September 30,~~March 31, 2013 and 2012 ~~and 2011~~ are as follows:

~~Major categories of net interest and dividend income during the nine months ended September 30, 2012 and 2011 are summarized as follows:~~

Major categories of net interest and dividend income during the three months ended ~~September 30,~~March 31, 2013 and 2012 ~~and 2011~~ are summarized as follows:

AmerInst has two operating segments: (1) reinsurance activity, which also includes investments and other activities, and (2) insurance activity, which offers professional liability solutions to professional service firms under the Agency Agreement with C&F, as defined in the “Overview” section below.

The tables below summarize the results of our operating segments for the ~~nine months ended September 30, 2012 and 2011.~~

~~The tables below summarize the results of our operating segments for the~~ three months ended ~~September 30, 2012~~March 31, 2013 and ~~2011.~~2012.


	Three Months Ended September 30, 2012								Three Months Ended March 31, 2013
	Reinsurance Segment		Insurance Segment			Total			Reinsurance Segment		Insurance Segment			Total
Revenues	$	1,011,644	$	209,770		$	1,221,414		$	1,155,745	$	303,687		$	1,459,432
Total losses and expenses		684,625		588,015			1,272,640			634,652		703,810			1,338,462
Segment income (loss)	$	327,019	$	(378,245	)	$	(51,226	)	$	521,093	$	(400,123	)	$	120,970
Identifiable assets	$	—	$	599,418		$	599,418		$	—	$	543,307		$	543,307

	Three Months Ended September 30, 2011								Three Months Ended March 31, 2012
	Reinsurance Segment		Insurance Segment			Total			Reinsurance Segment		Insurance Segment			Total
Revenues	$	277,006	$	91,587		$	368,593		$	979,199	$	215,081		$	1,194,280
Total losses and expenses		86,370		615,432			701,802			440,423		671,469			1,111,892
Segment income (loss)	$	190,636	$	(523,845	)	$	(333,209	)	$	538,776	$	(456,388	)	$	82,388
Identifiable assets	$	—	$	794,573		$	794,573		$	—	$	696,995		$	696,995

AmerInst Professional Services Limited (“APSL”), a subsidiary of AmerInst, has ~~entered into~~ employment agreements with four key members of senior management, which grant them phantom shares of the Company. Under these agreements, these employees were initially granted a total of 75,018 phantom shares of the Company on the date of their employment. The phantom shares are eligible for phantom dividends paid at the same rate as regular dividends on the Company’s common shares. The phantom dividends may be used only to purchase additional phantom shares with the purchase price of such phantom shares being the net book value of the Company’s actual common shares as of the end of the previous quarter. During the three months ~~and nine months~~ ended ~~September 30, 2012, 609 and 1,202~~March 31, 2013, 610 phantom shares were granted ~~respectively,~~ arising from the dividends declared on the Company’s common shares. ~~80,074~~79,927 phantom shares were outstanding at ~~September 30, 2012.~~

~~The~~Three employees’ and one employee’s interest in the phantom shares initially granted as well as any additional shares granted from dividends declared will vest on January 1, ~~2015.~~2015 and January 1, 2018, respectively. The liability payable to the three employees and one employee under this phantom share plan is equal to the value of the phantom shares based on the net book value of the Company’s actual common shares at the end of the previous quarter less the value of phantom shares initially granted and is payable in cash upon the earlier of the employee attaining 65 years of age or within 60 days of such employee’s death or permanent disability, including if such death or permanent disability occurs before January 1, ~~2015.~~2015 and January 1, 2018, respectively.

During the first quarter of 2013, one key member of APSL’s senior management forfeited his interest in his 12,009 phantom shares as a result of his departure from APSL prior to the phantom share’s January 1, 2015 vesting date. Also during the first quarter of 2013, a new key member of APSL’s senior management entered into an employment agreement with APSL and was granted 11,252 phantom shares of the Company on the date of their employment.

The following table provides a reconciliation of the beginning and ending balance of non-vested phantom shares for the three months ended March 31, 2013:

The liability relating to these phantom shares is recalculated quarterly based on the net book value of the Company’s common shares at the end of each quarter. As a result of the overall decrease in the book value of the Company’s common shares since the grant dates, no liability has been recorded by the Company relating to these phantom shares at ~~September 30, 2012.~~March 31, 2013.

Management’s discussion and analysis (“MD&A”) provides supplemental information, which sets forth the major factors that have affected our financial condition and results of operation and should be read in conjunction with our condensed consolidated financial statements and notes thereto included in this Form 10-Q.

Certain statements contained in this Form 10-Q, including this MD&A section, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, and contain information relating to us that is based on the beliefs of our management as well as assumptions made by, and information currently available to, our management. The words “expect,” “believe,” “may,” “could,” “should,” “would,” “estimate,” “anticipate,” “intend,” “plan,” “target,” “goal” and similar expressions as they relate to us or our management are intended to identify forward-looking statements.

All forward-looking statements, by their nature, are subject to risks and uncertainties. Our actual future results may differ materially from those set forth in our forward-looking statements. Please see the Introductory Note and Item 1A “Risk Factors” of our ~~2011~~2012 Annual Report on Form 10-K, as updated in our subsequent quarterly reports filed on Form 10-Q, and in our other filings made from time to time with the ~~SEC~~Commission after the date of this report for a discussion of factors that could cause our actual results to differ materially from those in the forward-looking statements. However, the risk factors listed in Item 1A “Risk Factors” or discussed in this Form 10-Q should not be construed as exhaustive and should be read in conjunction with other cautionary statements that are included herein. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect our

management’s analysis only as of the date they are made. We undertake no obligation to release publicly the results of any future revisions we may make to forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

The following discussion addresses our financial condition and results of operations for the periods and as of the dates indicated.

Unless otherwise indicated by the context in this quarterly report, we refer to AmerInst Insurance Group, Ltd. and its subsidiaries as the “Company”, “AmerInst,” “we” or “us.” “AMIC Ltd.” means AmerInst’s wholly-owned subsidiary, AmerInst Insurance Company, Ltd. “APSL” means AmerInst Professional Services, Limited, a Delaware corporation and wholly-owned subsidiary of AmerInst Mezco, Ltd. (“Mezco”) which is a wholly owned subsidiary of AmerInst. “Investco” means AmerInst Investment Company, Ltd., a wholly owned subsidiary of AMIC Ltd. ~~“AMIG” means our predecessor entity, AmerInst Insurance Group, Inc., a Delaware corporation.~~ Our principal offices are c/o Cedar Management Limited, 25 Church Street, Continental Building, P.O. Box HM 1601, Hamilton, Bermuda, HM GX.

AmerInst Insurance Group, Ltd. is a Bermuda holding company formed in 1998 that provides insurance protection for professional service firms and engages in investment activities. AmerInst has two operating segments: (1) reinsurance activity, which includes investments and other activities, and (2) insurance activity, which offers professional liability solutions to professional service firms. The revenues of the reinsurance activity operating segment and the insurance activity operating segment were ~~$2,381,972~~$1,155,745 and ~~$615,594~~$303,687 for the ~~nine~~three months ended ~~September 30, 2012~~March 31, 2013 compared to ~~$1,931,448~~$979,199 and ~~$236,015~~$215,081 for the ~~nine~~three months ended ~~September 30, 2011,~~March 31, 2012, respectively. The revenues for both operating segments were derived from business operations in the United States other than interest income on bank accounts maintained in Bermuda.

On September 25, 2009, APSL entered into an agency agreement (the “Agency Agreement”) with The North River Insurance Company, United States Fire Insurance Company, Crum & Forster Indemnity Company, Crum and Forster Insurance Company, and Crum & Forster Specialty Insurance Company (collectively, “C&F”) pursuant to which C&F appointed APSL as its exclusive agent for the purposes of soliciting, underwriting, quoting, binding, issuing, cancelling, non-renewing and endorsing accountants’ professional liability and lawyers’ professional liability insurance coverage in all 50 states of the United States and the District of Columbia. The initial term of the Agency Agreement is for four years with automatic one-year renewals thereafter.

We conduct our reinsurance business through AMIC Ltd., our subsidiary, which is a registered insurer in Bermuda. On September 25, 2009, AMIC Ltd. entered into a professional liability quota share agreement with C&F (the “Reinsurance Agreement”) pursuant to which C&F agreed to cede, and AMIC Ltd. agreed to accept as reinsurance, a 50% quota share of C&F’s liability under insurance written by APSL on behalf of C&F and classified by C&F as accountants’ professional liability and lawyers’ professional liability, subject to AMIC Ltd.’s surplus limitations. The initial term of the Reinsurance Agreement is for four years with automatic one-year renewals thereafter.

From June 1, 2005 through May 31, 2009, we were a party to a reinsurance contract with CAMICO Mutual Insurance Company (“CAMICO”), a California-based writer of accountants’ professional liability business.

We decided not to renew the CAMICO contract and permitted the contract to expire pursuant to its terms on May 31, 2009. We remain potentially liable for claims related to coverage through May 31, 2009.

On July 22, 2009, the Company received a payment of $500,891 from FFG Insurance Company, formerly known as Virginia Surety Company (“VSC”), in satisfaction of certain recoveries not previously remitted by VSC under retrocession contracts between the Company and VSC for the years 1989 through 1993. The $500,891 payment was recorded as a decrease in losses and loss adjustment expenses for the year ended December 31, 2009. Following this payment, the Company initiated arbitration with VSC (the “Arbitration”) to seek additional recoveries in respect of unpaid losses, unpaid premiums, fees and interest. During the arbitration, VSC conceded that $25,785 in unpaid premiums was due and a payment was remitted to the Company. On October 8, 2011, the Company was formally awarded $289,514 as a result of the Arbitration’s final outcome. The award represented unpaid losses of $241,943, fees of $11,280 and interest of $36,291. The total net award of $315,299 from VSC was recorded as a decrease in losses and loss adjustment expenses in the third quarter of 2011.

On January 1, 2003, we entered into a 15% ~~quota share~~ participation of ~~the~~Professionals Direct Insurance Company’s (“PDIC”) attorneys’ professional liability ~~coverage provided by Professionals Direct Insurance Company (“PDIC”).~~first excess cover. This participation terminated on December 31, 2003. ~~We remain potentially~~The final reported claim was closed during 2011. Although we no longer anticipate any claims, we may be liable for further claims related to this period of coverage.

Cedar Management Limited provides the day-to-day services necessary for the administration of our business. Our agreement with Cedar Management Limited renewed for one year beginning January 1, ~~2012~~2013 and ending December 31, ~~2012.~~2013. Mr. Stuart Grayston, our President, was formerly a director and officer of Cedar Management Limited, and Mr. Thomas R. McMahon, our Treasurer and Chief Financial Officer, is a shareholder, officer, director and employee of Cedar Management Limited.

Lawrence Carlson, an ~~accounting firm affiliated with a former director and chairman emeritus, provided~~independent contractor, provides the primary accounting functions to ~~APSL through August~~APSL. Our agreement with him, which was effective January 1, 2012. Subsequent to August 1, 2012 accounting functions were provided by an independent contractor, L. Carlson Consulting, Inc., although a formal contract between APSL and L. Carlson Consulting, Inc. was not in place until October 12, 2012. While the contract with L. Carlson Consulting, Inc.,2013, has no ending date itbut can be terminated by either party upon 30 days written notice. ~~Mowery & Schoenfeld, LLC, will continue to provide accounting and tax advisory services through the year-ended December 31, 2012 pursuant to its letter of understanding dated February 20, 2012.~~

The Country Club Bank of Kansas City, Missouri, provides portfolio management of fixed-income securities and directs our investments pursuant to guidelines approved by us. Harris Associates L.P. and Aurora Investment Management, LLC provide discretionary investment advice with respect to our equity investments. We have retained Oliver Wyman, an independent casualty actuarial consulting firm, to render advice regarding actuarial matters.

~~Nine~~Three months ended ~~September 30, 2012~~March 31, 2013 compared to ~~nine~~three months ended ~~September 30, 2011~~March 31, 2012

We ~~incurred~~recorded a net ~~loss~~income of ~~$670,373~~$120,970 during the ~~nine months ended September 30, 2012~~first quarter of 2013 compared to a net ~~loss~~income of ~~$927,299~~$82,388 for the same period in ~~2011.~~2012. The increase in net ~~loss incurred during the nine months ended September 30, 2012 was largely~~income is mainly attributable to ~~operating~~(i) the increase in commission income from $214,944 in the first quarter of 2012 to $303,562 in the first quarter of 2013 as a result of a higher volume of premiums written under the Agency Agreement and ~~management expenses incurred by APSL, which were partially offset by (1)~~(ii) the increase in net realized gains on investments ~~(2) net premiums earned under the Reinsurance Agreement, (3) commission income earned under the Agency Agreement, and (4) other income,~~from $609,093 in 2012 to $760,702 in 2013, as discussed ~~below~~ in further detail. The net loss incurred during the nine months ended September 30, 2011 was largely attributable to operating and management expenses incurred by APSL, which were partially offset by net realized gains on investments and the recognition of the additional recoveries associated with the Arbitration.detail below.

Our net premiums earned ~~for~~during the ~~nine months ended September 30, 2012~~first quarter of 2013 were ~~$878,616~~$329,876 compared to ~~$221,844 for~~$176,821 during the ~~nine months ended September 30, 2011,~~first quarter of 2012, an increase of ~~$656,772~~$153,055 or ~~296.1%~~86.6%. The net premiums earned during the ~~nine months~~quarters ended ~~September 30,~~March 31, 2013 and 2012 were attributable to cessions from C&F under the Reinsurance Agreement in the amount of $842,582 and to revisions to CAMICO premium estimates for prior years in the amounts of $36,034. The net premiums earned during the nine months ended September 30, 2011 were attributable to cessions from C&F under the Reinsurance Agreement in the amount of $232,368 and to revisions to CAMICO premium estimates for prior years in the amount of $(10,524).Agreement. The increase in net premiums earned under the Reinsurance Agreement resulted from increased cessions from C&F in ~~2012,~~2013, arising from a higher level of underwriting activity under the Agency Agreement due to the continued ~~successful~~ marketing of the program by APSL.

~~During~~For the ~~nine months~~quarters ended ~~September 30,~~March 31, 2013 and 2012, ~~and 2011,~~ we recorded commission income under the Agency Agreement of ~~$615,239~~$303,562 and ~~$235,874,~~$214,944, respectively, an increase of ~~$379,365~~$88,618 or ~~160.8%~~41.2%. This increase resulted from a higher volume of premiums written under the Agency Agreement in ~~2012.~~2013.

We recorded other income of $98,156 during the ~~nine months~~quarter ended ~~September 30,~~March 31, 2012, which ~~represents~~represented (1) a $60,000 refund of non-resident withholding tax that was erroneously deducted from dividend income earned on our equity investment portfolio in prior years and (2) net interest received from PDIC in the amount of $38,156 in relation to funds that were held in deposit by PDIC pursuant to the 2003 excess of loss reinsurance agreement between AMIC Ltd. and PDIC. No other income was recorded for the ~~nine months~~quarter ended ~~September 30, 2011.~~March 31, 2013.

We recorded net investment income of ~~$299,256 during~~$65,292 for the ~~nine months~~quarter ended ~~September 30, 2012~~March 31, 2013 compared to ~~$308,953~~$95,266 for the ~~nine months~~quarter ended ~~September 30, 2011.~~March 31, 2012. The ~~marginal~~ decline in net investment income ~~was~~is due to (i) the reduction in the investment portfolio due to sales of certain fixed income and equity ~~securities.~~securities and (ii) from lower yielding fixed income securities held in the Company’s investment portfolio during the first quarter of 2013 compared to the same period in 2012. The annualized investment yield, calculated as total interest and dividends divided by the net average amount of total investments and cash and cash equivalents, was ~~1.6%~~1.1% for the ~~nine months~~quarter ended ~~September 30, 2012, similar~~March 31, 2013, compared to the 1.6% yield earned for the ~~nine months~~quarter ended ~~September 30, 2011.~~March 31, 2012.

Sales of securities during the ~~nine months~~quarter ended ~~September 30, 2012~~March 31, 2013 resulted in realized gains on investments net of impairment of ~~$1,106,299~~$760,702 compared to ~~$1,400,792~~$609,093 during the ~~nine months~~quarter ended ~~September 30, 2011, a decrease~~March 31, 2012, an increase of ~~$294,493 or 21.0%.~~$151,609. The ~~decrease~~increase in realized gains primarily related to ~~decreased~~increased sales of equity securities in an unrealized gain position compared to ~~2011.~~2012.

For the ~~nine months~~quarters ended ~~September 30,~~March 31, 2013 and 2012, we recorded loss and loss adjustment expenses of ~~$526,614~~$206,173 and $110,514, respectively, derived by multiplying our estimated loss ratio of 62.5% and the net premiums earned under the Reinsurance Agreement of ~~$842,582. For the nine months ended September 30, 2011, we recorded loss~~$329,876 and loss adjustment recoveries of $170,078 as a result of the recognition of the additional recoveries awarded to the Company following the Arbitration in the amount of $315,299, net of loss and loss adjustment expenses of $145,221 derived by multiplying our estimated loss ratio of 62.5% and the premiums earned under the Reinsurance Agreement of $232,368.$176,821, respectively.

We recorded policy acquisition costs of ~~$313,073 during~~$122,061 in the ~~nine months ended September 30, 2012~~first quarter of 2013 compared to ~~$85,818~~$65,424 for the same period in ~~2011.~~2012. Policy acquisition costs, which are primarily ceding commissions paid to the ceding insurer, are established as a percentage of premiums ~~written;~~earned; therefore, any increase or decrease in premiums ~~written~~earned will result in a similar increase or decrease in policy acquisition costs. The policy acquisition costs recorded during the ~~nine months ended September 30,~~first quarter of 2013 and 2012 were ~~approximately~~ 37% of the net premiums earned under the Reinsurance Agreement of $842,582 plus some immaterial policy acquisition costs that were attributable to the revisions to the CAMICO premium estimates for prior years as noted above. The policy acquisition costs recorded during the nine months ended September 30, 2011 were approximately 37% of the premiums earned under the Reinsurance Agreement of $232,368, net of policy acquisition recoveries in the amount of $1,192 that were attributable to the revisions to the CAMICO premium estimates for prior years as noted above.$329,876 and $176,821, respectively.

We expensed operating and management expenses of ~~$2,828,252 for~~$1,010,228 in the ~~nine months ended September 30, 2012~~first quarter of 2013 compared to ~~$3,179,022~~$935,954 for the same period in ~~2011, a decrease~~2012, an increase of ~~$350,770~~$74,274 or ~~11.0%~~7.9%. The ~~decline is largely attributable~~primary reason for this increase was due to ~~(1) a reduction~~an increase in ~~professional~~directors’ fees and marketing expenses incurred by APSL during the nine months to September 30, 2012 compared to 2011 as a result of APSL bringing in-house most of its marketing and promotional work and reducing its reliance on third party contractors and service providers and, (2) a reduction in legal expenses associated with the Arbitration during the nine months ended September 30, 2012 compared to the same period in 2011.expenses.

The tables below summarize the results of the following AmerInst operating segments: (1) reinsurance activity, which also includes investments and other activities, and (2) insurance activity, which offers professional liability solutions to professional service firms under the Agency Agreement with C&F.

~~Three months ended September 30, 2012 compared to three months ended September 30, 2011~~

We incurred a net loss of $51,226 during the third quarter of 2012 compared to a net loss of $333,209 for the same period in 2011. The net loss incurred during the third quarter of 2012 was largely attributable to operating and management expenses incurred by APSL, which were partially offset by (1) net realized gains on investments, (2) net premiums earned under the Reinsurance Agreement and (3) commission income earned under the Agency Agreement. The net loss incurred during the third quarter of 2011 was largely attributable to operating and management expenses incurred by APSL, partially offset by net realized gains on investments and the recognition of the additional recoveries associated with the Arbitration.

Our net premiums earned during the third quarter of 2012 were $425,344 compared to $96,283 during the third quarter of 2011, an increase of $329,061 or 341.8%. The net premiums earned during the quarter ended September 30, 2012 were attributable to cessions from C&F under the Reinsurance Agreement in the amount of $389,310 and to revisions to CAMICO premium estimates for prior years in the amount of $36,034. The net premiums earned during the quarter ended September 30, 2011 were attributable to cessions from C&F under the Reinsurance Agreement in the amount of $106,807 and to revisions to CAMICO premium estimates for prior years in the amount of $(10,524). The increase in net premiums earned under the Reinsurance Agreement resulted from increased cessions from C&F in 2012, arising from a higher level of underwriting activity under the Agency Agreement due to the continued successful marketing of the program by APSL.

For the quarters ended September 30, 2012 and 2011, we recorded commission income under the Agency Agreement of $209,663 and $91,529, respectively, an increase of $118,134 or 129.1%. This increase resulted from a higher volume of premiums written under the Agency Agreement in 2012.

We recorded net investment income of $92,136 for the quarter ended September 30, 2012 compared to $96,128 for the quarter ended September 30, 2011. The marginal decline in net investment income is due to the reduction in the investment portfolio due to sales of certain equity securities. The annualized investment yield, calculated as total interest and dividends divided by the net average amount of total investments and cash and cash equivalents, was 1.5% for the quarter ended September 30, 2012, similar to the 1.5% yield earned for the quarter ended September 30, 2011.

Sales of securities during the quarter ended September 30, 2012 resulted in realized gains on investments net of impairment of $494,271 compared to $84,653 during the quarter ended September 30, 2011, an increase of $409,618. The increase in realized gains primarily related to increased sales of fixed income securities in an unrealized gain position compared to 2011 and to the decrease in other-than-temporary impairment charges compared to 2011.

For the quarters ended September 30, 2012, we recorded loss and loss adjustment expenses of $243,319 derived by multiplying our estimated loss ratio of 62.5% and the net premiums earned under the Reinsurance Agreement of $389,310. For the quarter ended September 30, 2011, we recorded loss and loss adjustment recoveries of $248,544 as a result of the recognition of the additional recoveries awarded to the Company following the Arbitration in the amount of $315,299, net of loss and loss adjustment expenses of $66,755 derived by multiplying our estimated loss ratio of 62.5% and the premiums earned under the Reinsurance Agreement of $106,807.

We recorded policy acquisition costs of $144,406 in the third quarter of 2012 compared to $38,482 for the same period in 2011. Policy acquisition costs, which are primarily ceding commissions paid to the ceding insurer, are established as a percentage of premiums written; therefore, any increase or decrease in premiums written will result in a similar increase or decrease in policy acquisition costs. The policy acquisition costs recorded during the third quarter of 2012 were approximately 37% of the premium earned under the Reinsurance Agreement of $389,310 plus some immaterial policy acquisition costs that were attributable to the revisions to the CAMICO premium estimates for prior years as noted above. The policy acquisition costs recorded during the third quarter of 2011 were approximately 37% of the premium earned under the Reinsurance Agreement of $106,807, net of policy acquisition recoveries in the amount of $1,192 that were attributable to the revisions to the CAMICO premium estimates for prior years as noted above.

We expensed operating and management expenses of $884,915 in the third quarter of 2012 compared to $911,864 for the same period in 2011, a decrease of $26,949 or 3.0%. The decline is largely attributable to (1) a reduction in professional and marketing expenses incurred by APSL during the quarter compared to 2011 as a result of APSL bringing in-house most of its marketing and promotional work and reducing its reliance on third party contractors and service providers and, (2) a reduction in legal expenses associated with the Arbitration during the quarter compared to the same period in 2011.


	Three Months Ended September 30, 2012								Three Months Ended March 31, 2013
	Reinsurance Segment		Insurance Segment			Total			Reinsurance Segment		Insurance Segment			Total
Revenues	$	1,011,644	$	209,770		$	1,221,414		$	1,155,745	$	303,687		$	1,459,432
Total losses and expenses		684,625		588,015			1,272,640			634,652		703,810			1,338,462
Segment income (loss)	$	327,019	$	(378,245	)	$	(51,226	)	$	521,093	$	(400,123	)	$	120,970
Identifiable assets	$	—	$	599,418		$	599,418		$	—	$	543,307		$	543,307

	Three Months Ended September 30, 2011								Three Months Ended March 31, 2012
	Reinsurance Segment		Insurance Segment			Total			Reinsurance Segment		Insurance Segment			Total
Revenues	$	277,006	$	91,587		$	368,593		$	979,199	$	215,081		$	1,194,280
Total losses and expenses		86,370		615,432			701,802			440,423		671,469			1,111,892
Segment income (loss)	$	190,636	$	(523,845	)	$	(333,209	)	$	538,776	$	(456,388	)	$	82,388
Identifiable assets	$	—	$	794,573		$	794,573		$	—	$	696,995		$	696,995

As of ~~September 30, 2012,~~March 31, 2013, our total investments were ~~$21,062,670, a decrease~~$20,840,534, an increase of ~~$1,682,880,~~$591,232, or ~~7.4%~~2.9%, from ~~$22,745,550~~$20,249,302 at December 31, ~~2011.~~2012. The ~~decrease~~increase was primarily due to the increase in the fair value of certain equity securities as a result of favorable market conditions, partially offset by the sales of certain equity ~~and fixed income~~ securities. The cash and cash equivalents balance ~~increased~~decreased from ~~$904,485~~$1,034,485 at December 31, ~~2011~~2012 to ~~$1,002,060~~$869,385 at ~~September 30, 2012, an increase~~March 31, 2013, a decrease of ~~$97,575~~$165,100 or ~~10.8%~~16%. 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 funds. The restricted cash and cash equivalents balance ~~increased~~decreased from ~~$435,924~~$1,349,744 at December 31, ~~2011~~2012 to ~~$2,318,808~~$1,136,771 at ~~September 30, 2012, an increase~~March 31, 2013, a decrease of ~~$1,882,884.~~$212,973. The ~~increase~~decrease is due to the timing of sales and maturities of investments held as restricted cash at ~~September 30, 2012~~March 31, 2013 that have not yet been reinvested. Other invested assets remained unchanged at $1,470,000 as at March 31, 2013 and December 31, 2012. The ratio of cash, ~~and~~ total investments and other invested assets to total liabilities at ~~September 30, 2012~~March 31, 2013 was ~~7.36:~~6.51:1, compared to a ratio of ~~8.25:~~6.34:1 at December 31, ~~2011.~~2012.

The assumed reinsurance balances receivable represents the current assumed premiums receivable less commissions payable to the fronting carriers. As of ~~September 30, 2012,~~March 31, 2013, the balance was ~~$283,755~~$368,171 compared to ~~$183,518~~$274,526 as of December 31, ~~2011.~~2012. The increase resulted from a higher level of premiums assumed under the Reinsurance ~~Agreement and to revisions to the CAMICO premium estimates for prior years as noted above.~~Agreement.

The assumed reinsurance payable represents current reinsurance losses payable to the fronting carriers. As of March 31, 2013, the balance was $15,665 compared to $178,880 as of December 31, 2012. This balance fluctuates due to the timing of reported losses.

Deferred policy acquisition costs, which represent the deferral of ceding commission expense related to premiums not yet earned, increased from ~~$146,226~~$268,643 at December 31, ~~2011~~2012 to ~~$251,294~~$362,808 at ~~September 30, 2012.~~March 31, 2013. The increase in deferred policy acquisition costs in ~~2012~~2013 was ~~primarily~~ due to the increase in both net premiums written and unearned premiums assumed under the Reinsurance Agreement compared to the prior year. The ceding commission rate under the Reinsurance Agreement is 37%.

Prepaid expenses and other assets were ~~$269,316~~$399,220 at ~~September 30, 2012,~~March 31, 2013, a decrease of ~~28.8%~~3.1% from December 31, ~~2011.~~2012. The balance primarily relates to (1) prepaid directors’ and officers’ liability insurance costs, (2) the prepaid directors’ retainer, (3) prepaid professional fees and ~~(3)~~(4) premiums due to APSL under the Agency Agreement. The decrease in the balance was attributable to a decrease in premiums due to APSL under the Agency Agreement. This balance fluctuates due to the timing of the premium receipts by APSL.

Accrued expenses and other liabilities primarily represent premiums payable by APSL to C&F under the Agency Agreement and expenses accrued relating largely to professional fees. The balance decreased from ~~$1,396,332~~$1,490,727 at December 31, ~~2011~~2012 to ~~$1,144,699~~$1,167,175 at ~~September 30, 2012,~~March 31, 2013, a decrease of ~~$251,633~~$323,552 or ~~18.0%~~21.7%. The decrease in the balance was attributable to a decrease in premiums payable by APSL to C&F under the Agency Agreement and to a reduction in expenses accrued in relation to professional fees. This balance fluctuates due to the timing of the ~~payments.~~(1) premium payments to C&F and (2) payments of professional fees.

Our cash needs consist of settlement of losses and expenses under our reinsurance treaties and funding day-to-day operations. During the continued implementation of our business plan, our management expects to meet these cash needs from cash flows arising from our investment portfolio. Because substantially all of our assets are marketable securities, we expect that we will have sufficient flexibility to provide for unbudgeted cash needs which may arise without resorting to borrowing, subject to regulatory limitations.

Total cash, investments and ~~investments~~other invested assets increased from ~~$24,085,959~~$24,103,531 at December 31, ~~2011~~2012 to ~~$24,383,538~~$24,316,690 at ~~September 30, 2012,~~March 31, 2013, an increase of ~~$297,579~~$213,159 or ~~1.2%~~0.9%. The net increase resulted primarily from the increase in the fair value of certain equity securities as a result of favorable market conditions and positive cash inflows in relation to net investment income and net premiums received under the Reinsurance Agreement in the amount of ~~$585,656.~~$106,036. These increases were partially offset by net cash outflows to fund the operations of APSL and dividends of ~~$327,992~~$168,854 paid during the ~~year.~~first quarter of 2013.

The Bermuda Monetary Authority has authorized Investco to purchase the Company’s common shares from shareholders who have died or retired from the practice of public accounting and on a negotiated basis. During the ~~nine months and~~ three months ended ~~September 30, 2012,~~March 31, 2013, no such transactions occurred. Through ~~September 30, 2012,~~March 31, 2013, Investco had purchased ~~141,526~~152,801 common shares from shareholders who had died or retired for a total purchase price of ~~$3,860,345.~~$4,229,376. From time to time, Investco has also purchased shares in privately negotiated transactions. Through ~~September 30, 2012,~~March 31, 2013, Investco had purchased an additional 75,069 common shares in such privately negotiated transactions for a total purchase price of $1,109,025.

We paid dividends of $0.25 per share during the first ~~and third quarters~~quarter of ~~2012,~~2013, which amounted to total ordinary cash dividends of $170,905 and $171,672, respectively. The dividends paid in 2012 have been reduced by $14,585, which represents a write back of uncashed dividends issued prior to 2007 to shareholders that we have been unable to locate.$168,854. Since we began paying dividends in 1995, our original shareholders have received ~~$19.37~~$19.62 in cumulative dividends per share. When measured by a total rate of return calculation, this has resulted in an effective annual rate of return of approximately ~~9.68%~~9.6% from the inception of the Company, based on a per share purchase price of $8.33 paid by the original shareholder, and using an unaudited book value of ~~$32.86~~$33.07 per share as of ~~September 30, 2012.~~March 31, 2013. Although we have paid cash dividends on a regular basis in the past, the declaration and payment of cash dividends in the future will be at the discretion of our board of directors and will depend on, among other things, our financial condition, results of operations, current and anticipated cash needs and other factors that our board of directors considers relevant.

The Company’s critical accounting policies are discussed in Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, ~~2011.~~2012.

We file annual, quarterly, and current reports, proxy statements and other information with the Commission. You may read any public document we file with the Commission at the Commission’s public reference room at 100 F Street, NE, Washington, DC 20549. Please call the Commission at 1-800-SEC-0330 for information on the public reference room. The Commission maintains an internet site that contains annual, quarterly, and current reports, proxy and information statements and other information that issuers (including AmerInst) file electronically with the Commission. The Commission’s internet site iswww.sec.gov.

Our internet site iswww.amerinst.bm. We make available free of charge through our internet site our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to the Securities Exchange Act of 1934, as soon as reasonably practicable after such material is electronically filed with, or furnished to,

the Commission. We also make available, through our internet site, via links to the Commission’s internet site, statements of beneficial ownership of our equity securities filed by our directors, officers, 10% or greater shareholders and others under Section 16 of the Securities Exchange Act. In addition, we post onwww.amerinst.bm our Memorandum of Association, our Bye-Laws, our Statement of Share Ownership Policy, Charters for our Audit Committee and Governance and Nominations Committee, as well as our Code of Business Conduct and Ethics. You can request a copy of these documents, excluding exhibits, at no cost, by writing or telephoning us c/o Cedar Management Limited, 25 Church Street, Continental Building, P.O. Box HM 1601 Hamilton, Bermuda HMGX, Attention: Investor Relations (441) 295-6015. The information on our internet site is not incorporated by reference into this report.

As of ~~September 30, 2012,~~March 31, 2013, the end of the period covered by this Form 10-Q, our management, including our Principal Executive Officer and Principal Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934). Based upon that evaluation, our Principal Executive Officer and Principal Financial Officer each concluded that as of ~~September 30, 2012,~~March 31, 2013, the end of the period covered by this Form 10-Q, we maintained effective disclosure controls and procedures.

Our management, including our Principal Executive Officer and Principal Financial Officer, has reviewed our internal control over financial reporting (as defined in Rule 13a-15(f) under the Securities Exchange Act of 1934). There have been no significant changes in our internal control over financial reporting during our most recently completed fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are party to various legal proceedings generally arising in the normal course of our business. While any proceeding contains an element of uncertainty, we do not believe that the eventual outcome of any litigation or arbitration proceeding to which we are presently a party ~~could~~will have a material adverse effect on our financial condition or business. Pursuant to our insurance and reinsurance agreements, disputes are generally required to be finally settled by arbitration.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, you should carefully consider the factors discussed in Part I, Item 1A. “Risk Factors” in our ~~2011~~2012 Annual Report on Form 10-K, as updated in our subsequent quarterly reports. The risks described in our ~~2011~~2012 Annual Report on Form 10-K are not the only risks facing us. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition and/or operating results.

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.

Filed with the Quarterly Report on Form 10-Q for the Quarter Ended March 31, 2013

~~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.~~

~~Filed with the Quarterly Report on Form 10-Q for the Quarter Ended September 30, 2012~~


BERMUDA		98-0207447
(State or other jurisdiction of Incorporation or Organization)		(I.R.S. Employer Identification No.)

c/o Cedar Management Limited 25 Church Street, Continental Building P.O. Box HM 1601, Hamilton, Bermuda		HMGX
(Address of Principal Executive Offices)		(Zip Code)


	September 30, 2012			September 30, 2011
Total proceeds on sales of available-for-sale securities	$	3,482,839		$	1,290,697
Proceeds from redemptions of fixed maturity investments		500,000			—
Total proceeds from maturities of fixed maturity investments		—			—
Gross gains on sales		527,239			249,241
Gross losses on sales		—			(12,138	)
Impairment losses		(32,968	)		(152,450	)


	September 30, 2012			September 30, 2011
Interest earned:
Fixed maturity investments	$	259,794		$	258,828
Cash and cash equivalents		463			259
Dividends earned		135,611			155,994
Investment expenses		(96,612	)		(106,128	)

Net investment income	$	299,256		$	308,953


	March 31, 2013			March 31, 2012
Total proceeds on sales of available-for-sale securities	$	1,462,699		$	1,284,200
Total proceeds from maturities of fixed maturity investments		250,000			200,000
Gross gains on sales		841,856			673,282
Impairment losses		(81,154	)		(64,189	)


	Hedge Fund Investment Nine Months ended
	September 30, 2012		September 30, 2011
Balance classified as Level 3, beginning of period	$	1,395,933	$	1,484,884
Total gains or losses included in earnings:		—		—
Net realized gains		—		—
Change in fair value of hedge fund investment		50,586		(47,218	)
Purchases		—		—
Sales		—		—
Transfers in and/or out of Level 3		—		—

Ending balance, end of period	$	1,446,519	$	1,437,666


	Amortized Cost		Estimated Fair Value
December 31, 2012
Due in one year or less	$	1,081,039	$	1,094,775
Due after one year through five years		3,410,272		3,603,525
Due after five years through ten years		2,658,925		2,775,483
Due after ten years		190,300		191,699

Total	$	7,340,536	$	7,665,482


	Nine Months Ended September 30, 2012
	Reinsurance Segment		Insurance Segment			Total
Revenues	$	2,381,972	$	615,594		$	2,997,566
Total losses and expenses		1,811,075		1,856,864			3,667,939
Segment income (loss)	$	570,897	$	(1,241,270	)	$	(670,373	)
Identifiable assets	$	—	$	599,418		$	599,418

	Nine Months Ended September 30, 2011
	Reinsurance Segment		Insurance Segment			Total
Revenues	$	1,931,448	$	236,015		$	2,167,463
Total losses and expenses		994,895		2,099,867			3,094,762
Segment income (loss)	$	936,553	$	(1,863,852	)	$	(927,299	)
Identifiable assets	$	—	$	794,573		$	794,573


	Number of Phantom Shares
Outstanding - beginning		80,074
Granted – initial grant on the employment date		11,252
Granted – arising from dividends declared during the quarter		610
Forfeited – due to departure from APSL prior to vesting date		(12,009	)

Outstanding - ending		79,927


Exhibit Number		Description

31.1		Certification of Stuart H. Grayston pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Thomas R. McMahon pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Stuart H. Grayston pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Thomas R. McMahon pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document


Dated: May 14, 2013	AMERINST INSURANCE GROUP, LTD.
	(Registrant)

	By:	/s/ STUART H. GRAYSTON
		Stuart H. Grayston
		President (Principal Executive Officer, duly authorized to sign this Report in such capacity and on behalf of the Registrant)

	By:	/S/ THOMAS R. MCMAHON
		Thomas R. McMahon
		Chief Financial Officer (Principal Financial Officer, duly authorized to sign this Report in such capacity and on behalf of the Registrant)


Exhibit Number		Description

31.1		Certification of Stuart H. Grayston pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2		Certification of Thomas R. McMahon pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1		Certification of Stuart H. Grayston pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2		Certification of Thomas R. McMahon pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101.INS		XBRL Instance Document

101.SCH		XBRL Taxonomy Extension Schema Document

101.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		XBRL Taxonomy Extension Label Linkbase Document

101.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		XBRL Taxonomy Extension Definition Linkbase Document


~~Dated: November 14, 2012~~	~~AMERINST INSURANCE GROUP, LTD.~~
	~~(Registrant)~~

	~~By:~~	~~/s/ STUART~~ ~~H. GRAYSTON~~
		~~Stuart H. Grayston~~
		~~President (Principal Executive Officer, duly authorized to sign this Report in such capacity and on behalf of the Registrant)~~

	~~By:~~	/S~~/ THOMAS~~ ~~R. M~~CM~~AHON~~
		~~Thomas R. McMahon~~
		~~Chief Financial Officer (Principal Financial Officer, duly authorized to sign this Report in such capacity and on behalf of the Registrant)~~


~~Exhibit~~ ~~Number~~		~~Description~~

~~31.1~~		~~Certification of Stuart H. Grayston pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~31.2~~		~~Certification of Thomas R. McMahon pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.~~

~~32.1~~		~~Certification of Stuart H. Grayston pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~32.2~~		~~Certification of Thomas R. McMahon pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.~~

~~101.INS~~		~~XBRL Instance Document~~

~~101.SCH~~		~~XBRL Taxonomy Extension Schema Document~~

~~101.CAL~~		~~XBRL Taxonomy Extension Calculation Linkbase Document~~

~~101.LAB~~		~~XBRL Taxonomy Extension Label Linkbase Document~~

~~101.PRE~~		~~XBRL Taxonomy Extension Presentation Linkbase Document~~

~~101.DEF~~		~~XBRL Taxonomy Extension Definition Linkbase Document~~

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