FORM 10-K 

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

           [ x ]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]

                   For the fiscal year ended December 31, 1996

                                       OR

         [   ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]

         For the transition period from ____________ to ________________

                  Commission file number         1-10816       

                           MGIC Investment Corporation
             (Exact name of registrant as specified in its charter)

                Wisconsin                              39-1486475
       (State or other jurisdiction of              (I.R.S. Employer
       incorporation or organization)              Identification No.)


        MGIC Plaza, 250 East Kilbourn Avenue, Milwaukee, Wisconsin 53202
               (Address of principal executive offices)(Zip Code)


   Registrant's telephone number, including area code         (414) 347-6480  

           Securities Registered Pursuant to Section 12(b) of the Act:

             Title of Each Class:       Common Stock, Par Value $1 Per Share

             Name of Each Exchange
             on Which Registered:       New York Stock Exchange

             Securities Registered Pursuant to Section 12(g) of the Act:

                  Title of Class:       None

   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

   State the aggregate market value of the voting stock held by non-
   affiliates of the Registrant as of January 31, 1997:  $3,563,865,205.*

   * Solely for purposes of computing such value and without thereby
   admitting that such persons are affiliates of the Registrant, shares held
   by directors and executive officers of the Registrant are deemed to be
   held by affiliates of the Registrant.

   Indicate the number of shares outstanding of each of the Registrant's
   classes of common stock as of January 31, 1997:  59,029,444.

   The following documents have been incorporated by reference in this
   Form 10-K, as indicated:

                                           Part and Item Number of
                                           Form 10-K Into Which
   Document                                Incorporated

   1.   Information from 1996 Annual       Items 1 and 3 of Part I
        Report to Shareholders (for        Items 5 through 8 of Part II
        Fiscal Year Ended 
        December 31, 1996)

   2.   Proxy Statement for the 1997       Item 10 through 13 of Part III
        Annual Meeting of Shareholders


   Indicate by check mark if disclosure of delinquent filers pursuant to Item
   405 of Regulation S-K is not contained herein, and will not be contained,
   to the best of Registrant's knowledge, in definitive proxy or information
   statements incorporated by reference in Part III of this Form 10-K or any
   amendment to this Form 10-K.    X  


                                     Part I


   Item 1.  Business.

   A.  General

        MGIC Investment Corporation (the "Company") is a holding company
   which, through its indirect wholly owned subsidiary, Mortgage Guaranty
   Insurance Corporation ("MGIC"), is the leading provider of private
   mortgage insurance coverage in the United States to mortgage bankers,
   savings institutions, commercial banks, mortgage brokers, credit unions
   and other lenders.  Private mortgage insurance covers residential first
   mortgage loans and expands home ownership opportunities by enabling people
   to purchase homes with less than 20% down payments.  If the home owner
   defaults, private mortgage insurance reduces and, in some instances,
   eliminates the loss to the insured institution.  Private mortgage
   insurance also facilitates the sale of low down payment mortgage loans in
   the secondary mortgage market, principally to the Federal Home Loan
   Mortgage Corporation ("Freddie Mac") and the Federal National Mortgage
   Association ("Fannie Mae").  In addition to mortgage insurance, the
   Company, through other subsidiaries, provides various underwriting and
   contract services related to home mortgage lending.  

        MGIC is licensed in all 50 states of the United States, the District
   of Columbia and Puerto Rico.  MGIC's claims-paying ability is rated "AA+"
   by Standard & Poor's Corporation ("S&P") and "Aa2" by Moody's Investors
   Service, Inc. ("Moody's").

        The MGIC name has been associated with private mortgage insurance
   since 1957.  The Company was formed in 1984 by members of the management
   of Wisconsin Mortgage Assurance Corporation ("WMAC").  WMAC's parent
   ("WMAC Investment," then known as MGIC Investment Corporation) and its
   predecessors were publicly traded from 1961 until 1982.  WMAC, then known
   as Mortgage Guaranty Insurance Corporation, was the largest private
   insurer of residential first mortgages in the United States.  

        On February 28, 1985, the Company acquired certain assets and
   businesses of WMAC Investment and WMAC, including the MGIC name and
   offices of WMAC, and hired substantially all of WMAC's employees
   ("Acquisition").  WMAC retained substantially all of its insurance in
   force, net of domestic reinsurance (the "WMAC Book" and sometimes in other
   documents referred to as the "Old Book").  On March 1, 1985, MGIC
   commenced writing new insurance (the "MGIC Book" and sometimes in other
   documents referred to as the "New Book").  Effective as of the time of the
   Acquisition, WMAC generally ceased writing new insurance and reinsured
   100% of the WMAC Book with several international reinsurers.  One of the
   reinsurers of the WMAC Book retroceded a 20% quota share of the WMAC Book
   to a subsidiary of the Company.  Subsequently, MGIC assumed a portion of
   such reinsurance and at December 31, 1996, MGIC reinsured approximately
   65% of the WMAC Book.  See "The WMAC Book" below.

        The Company is a Wisconsin corporation.  Its principal office is
   located at MGIC Plaza, 250 East Kilbourn Avenue, Milwaukee, Wisconsin
   53202 (telephone number (414) 347-6480).

        The following is a "Safe Harbor" Statement under the Private
   Securities Litigation Reform Act of 1995, which applies to all statements
   in this Form 10-K, including its Exhibits, which are not historical facts
   and to all oral statements that the Company may make from time to time
   which are not historical facts (such written and oral statements are
   herein referred to as "forward looking statements"):

             Actual results may differ materially from those contemplated by
   the forward looking statements.  These forward looking statements involve
   risks and uncertainties, including but not limited to, the following
   risks:

        -    that interest rates may increase rather than remain stable or
             decrease; that demand for housing generally or in MGIC's market
             segment may grow less than projected or may decrease for any
             number of reasons including changes in interest rates, adverse
             economic conditions, or other reasons;

        -    that government housing policy may change, including changes in
             Federal Housing Administration ("FHA") loan limits, and changes
             in the statutory charters and coverage requirements of Freddie
             Mac and Fannie Mae;

        -    that MGIC's market share of new insurance written or the
             amount of new insurance written may grow less than
             projected or may decrease as a result of factors affecting
             housing demand, government housing policy and Freddie Mac
             and Fannie Mae discussed above or as a result of
             underwriting changes by the Company, or actions taken by
             the Company's competitors, including their underwriting
             criteria, pricing or products offered, or for other
             reasons;

        -    that cancellations may be higher than projected and
             persistency may be lower than projected due to
             refinancings, changes in Freddie Mac or Fannie Mae
             cancellation policies or legislation or other factors; and

        -    that delinquencies, incurred losses or paid losses may
             increase faster than projected as a result of adverse
             changes in regional or national economies which affect
             borrowers' incomes or housing values.

   Investors are also directed to other risks discussed in documents filed by
   the Company with the Securities and Exchange Commission.

   B.  The MGIC Book

      Types of Product 

        There are two principal types of private mortgage insurance:
   "primary" and "pool."

        Primary Insurance.  Primary insurance provides mortgage default
   protection on individual loans and covers unpaid loan principal,
   delinquent interest and certain expenses associated with the default and
   subsequent foreclosure (collectively, the "claim amount").  The insurer
   generally pays the coverage percentage of the claim amount specified in
   the primary policy, but has the option to pay 100% of the claim amount and
   acquire title to the property.  The claim amount averages about 115% of
   the unpaid principal balance of the loan. Primary insurance generally
   applies to owner occupied, first mortgage loans on one-to-four family
   homes, including condominiums.  Primary coverage can be used on any type
   of residential mortgage loan instrument approved by the mortgage insurer. 
   References in this document to amounts of insurance written or in force,
   risk written or in force and other historical data related to MGIC's
   insurance refer only to direct (before giving effect to reinsurance)
   primary insurance, unless otherwise indicated.

      The following table shows direct primary insurance in force and net
   primary risk in force (the risk, determined by the coverage percentage,
   which is retained after giving effect to reinsurance) for the MGIC Book as
   of the dates indicated:

   
<TABLE>
   <CAPTION>

                                                             Primary Insurance and Risk In Force
                                                                        December 31,

                                              1996             1995          1994            1993            1992 

                                                                  (In millions of dollars)
   <S>                                       <C>            <C>            <C>             <C>            <C>            
   Direct Primary
   Insurance In Force  . . . . . . .         $131,397       $120,341       $104,416        $85,848        $71,246

   Net Primary
   Risk In Force . . . . . . . . . .           28,565         24,593        19,664*         13,971         10,638

   ____________________
   *  Reflects the reassumption in 1994 of mortgage insurance previously
      reinsured.  See "Reinsurance" below.

   </TABLE>



        The coverage percentage provided by MGIC is determined by the lender,
   usually in order to comply with Freddie Mac and Fannie Mae requirements to
   reduce loss exposure on loans purchased by them to a designated percentage
   of the home's value.  Until 1995, Freddie Mac and Fannie Mae had generally
   required that loss exposure be reduced to 75% of the home's value.
   Effective in the first quarter of 1995, Freddie Mac and Fannie Mae changed
   their coverage requirements for most new loans as follows:

   
<TABLE>
    Freddie Mac and Fannie Mae Coverages
   <CAPTION>
    
                  Thirty Year and Certain                     Fixed Rate, Fully Amortizing Mortgage Loans with
                    Other Mortgage Loans                                  Term of 20 years or less
 
    Loan-to-Value                 New        Previous        Loan-to-Value            New         Previous
    Ratio:                     Coverage      Coverage         Ratio:                Coverage      Coverage

    <S>                           <C>          <C>           <C>                      <C>           <C>
    90.01 + 95.00%                30%          25%*          90.01 + 95.00%           25%           25%*
    (up to 97% for Fannie Mae)
    85.01 + 90.00%                25%           17%          85.01 + 90.00%           12%            17%
    80.01 + 85.00%                12%           12%          80.01 + 85.00%            6%            12%

   ____________________
   *    Prior to 1995, Freddie Mac and Fannie Mae had increased coverage from
        22% to 25%.

   </TABLE>



        As a result of these deeper coverage requirements, coverage
   percentages on new insurance written in 1995 and 1996 were higher than
   coverages on loans insured in 1994 and prior years. The following table
   shows, by loan-to-value ("LTV") and coverage categories, new insurance
   written during the periods indicated:

   Coverage Categories as a Percentage of New Insurance Written

                                 Year Ended December 31,

   LTV and                     1996         1995        1994
   Coverage

   95% LTV/                    38.4%        34.1%        1.5%
   30% Coverage

   90% LTV/                    38.9%        33.0%        3.5%
   25% Coverage

        MGIC charges higher premium rates for higher coverages, and the
   deeper Freddie Mac and Fannie Mae coverage requirements have resulted in
   higher premiums charged on similar types of loans with the same
   characteristics (such as LTV and loan type) affecting the premium rate. 
   MGIC expects that these deeper coverage requirements will cause its
   average claim amount to increase, with no significant impact on
   underwriting expenses or frequency of default.  Because reserves for
   losses are only established by MGIC for loans in default, MGIC receives
   increased premium from deeper coverage before any higher losses may be
   incurred resulting from that deeper coverage. MGIC uses a pricing
   methodology for these coverages similar to other types of coverage.
   However, there can be no assurance that the higher premium rates
   adequately reflect the risks associated with increased coverages.  In
   addition, such higher premium rates may make government insurance
   programs, particularly programs of the FHA, more competitive.  See "Sales
   and Marketing and Competition,Competition" and "Regulation,Indirect
   Regulation" below. There can be no assurance that the deeper coverage
   requirements of Freddie Mac and Fannie Mae will remain in effect.

        Mortgage insurance coverage cannot be terminated by the insurer,
   except for non-payment of premium, and remains renewable at the option of
   the insured lender, generally at the renewal rate fixed when the loan was
   initially insured.  Lenders may cancel insurance at any time at their
   option or because of mortgage repayment, which may be accelerated because
   of the refinancing of mortgages.  In the case of a loan purchased by
   Freddie Mac or Fannie Mae, a borrower meeting certain conditions may
   require the mortgage servicer to cancel insurance upon the borrower's
   request when the principal balance of the loan is 80% or less of the
   home's current value and in certain circumstances when such principal
   balance is 80% or less of the home's original value.

        The Company understands that Fannie Mae is considering making changes
   in its cancellation policy. These changes would, among other things,
   generally provide for automatic cancellation of mortgage insurance,
   including existing insurance in force, when the loan reaches one-half of
   its amortization period and certain requirements relating to timeliness of
   borrower mortgage payments are met.  The Company does not believe that
   adoption of this automatic cancellation policy by Fannie Mae would have a
   material adverse effect on its business.

        Some states require that mortgage servicers periodically notify
   borrowers of the circumstances in which they may request a mortgage
   servicer to cancel insurance and some states allow the borrower to require
   the mortgage servicer to cancel insurance under certain circumstances.
   Bills have been introduced and are pending in a number of other states for
   such purposes.  The Company understands that Fannie Mae's draft policy
   also requires that mortgage servicers give notice to borrowers that
   insurance may be cancelled under Fannie Mae's policy in certain
   circumstances.  In February, 1997, a bill was introduced in the United
   States Senate that would require, for loans originated 90 days or more
   after the enactment of the bill, automatic cancellation of private
   mortgage insurance if the principal balance of the loan is 80% or less of
   the home's original value. Among other things, the bill also would require
   the servicer to advise the borrower, in writing at origination, with each
   periodic statement of account and for loans outstanding on the date the 
   bill is enacted, not later than 180 days after enactment, of the 
   circumstances in which mortgage insurance may be cancelled. Earlier in
   1997, a bill was introduced in the United States House of Representatives
   that would require the servicer to advise the borrower in writing of the
   circumstances in which mortgage insurance may be cancelled.

        Coverage tends to continue in areas experiencing economic contraction
   and housing price depreciation.  The persistency of coverage in such areas
   coupled with cancellation of coverage in areas experiencing economic
   expansion and housing price appreciation can increase the percentage of
   the insurer's portfolio comprised of loans in economically weak areas. 
   This development can also occur during periods of heavy mortgage
   refinancing, such as occurred during 1993 and early 1994, because
   refinanced loans in areas of economic expansion experiencing property
   value appreciation are less likely to require mortgage insurance at the
   time of refinancing, while refinanced loans in economically weak areas not
   experiencing property value appreciation are more likely to require
   mortgage insurance at the time of refinancing or not qualify for
   refinancing at all and, thus, remain subject to the mortgage insurance
   coverage.

        When a borrower refinances an MGIC-insured mortgage loan by paying it
   off in full with the proceeds of a new mortgage, the insurance on that
   existing mortgage is cancelled, and insurance on the new mortgage is
   considered to be new primary insurance written.  Therefore, continuation
   of MGIC's coverage from a refinanced loan to a new loan results in both a
   cancellation of insurance and new insurance written.  The percentage of
   primary risk written with respect to loans representing refinances was
   13.7% in 1996, as compared to 9.3% in 1995.  Refinance loans represented
   23.5%, 15.4%, 7.7% and 9.5% of primary risk written during the successive
   quarters of 1996.

        In addition to varying with the coverage percentage, MGIC's premium
   rates vary depending upon the perceived risk of a claim on the insured
   loan and, thus, take into account the LTV, the loan type (fixed payment
   versus non-fixed payment), mortgage term and coverage percentage. Premium
   rates cannot be changed after the issuance of coverage.  Because the
   Company believes that over the long term each region of the United States
   is subject to similar factors affecting risk of loss on insurance written,
   MGIC generally utilizes a nationally based, rather than a regional or
   local, premium rate policy.

        Mortgage lenders usually require mortgage borrowers to fund the
   mortgage insurance premiums, which the lenders pay to the mortgage
   insurer.  MGIC has three basic types of premium payment plans:  monthly,
   annual and single premium plans.During 1996 and 1995, these premium plans
   represented the following dollar amounts and percentages of new insurance
   written:

                         Premium Plans as Percentages of
                              New Insurance Written

                                    1996                        1995
                                        (In millions of dollars)

    Monthly premium plan         $29,138   88.9%             $25,198   83.2%
    Annual premium plan            3,333   10.2                4,726   15.6
    Single premium plan              285    0.9                  353    1.2
                                 -------  ------             -------  ------
      Total                      $32,756  100.0%             $30,277  100.0%
                                 =======  ======             =======  ======


        Under the monthly premium plan, a monthly premium payment is made to
   MGIC to provide only one month of coverage, rather than one year of
   coverage provided by the annual premium plan.  To offset the reduced
   initial cash flow, the annualized premium rates for the monthly premium
   plan are higher than the premium rates for the annual plan for comparable
   loans.

        Under the annual premium plan, the initial premium is paid to MGIC in
   advance, and earned over the next twelve months of coverage, with annual
   renewal premiums paid in advance thereafter and earned over the subsequent
   twelve months of coverage.  The annual premiums can be paid with either a
   higher premium rate for the initial year of coverage and lower premium
   rates for the renewal years, or with premium rates which are equal (level)
   for the initial year and subsequent renewal years.

        Under the single premium plan, a single payment is made to MGIC,
   covering a specified term exceeding 12 months, which can be either non-
   refundable or refundable if the coverage is cancelled by the insured
   lender.

        Pool Insurance.  Pool insurance is generally used as an additional
   "credit enhancement" for certain secondary market mortgage transactions. 
   Pool insurance generally covers the loss on a defaulted mortgage loan
   which exceeds the claim payment under the primary coverage, if primary
   insurance is required on that mortgage loan, as well as the total loss on
   a defaulted mortgage loan which did not require primary insurance, in each
   case up to a stated aggregate loss limit.  At December 31, 1996, net MGIC
   Book pool insurance in force was $740 million, representing $181 million
   of net risk in force.  Virtually all of such net risk in force was written
   or committed to prior to 1989.

        In 1996, MGIC began to offer pool insurance generally covering fixed
   rate, 30-year mortgage loans delivered to Freddie Mac and Fannie Mae
   ("agency pool insurance").  The aggregate loss limit on agency pool
   insurance does not exceed 1% of the aggregate original principal balance
   of the mortgage loans in the pool.  New risk written in 1996 under agency
   pool insurance was minimal, and the Company does not anticipate that new
   risk written in 1997 under agency pool insurance will be material to its
   total risk in force.

      Customers 

        Originators of residential mortgage loans such as mortgage bankers,
   savings institutions, commercial banks, mortgage brokers, credit unions
   and other lenders (e.g., financial, insurance and service companies) are
   the customers of MGIC and in 1996 accounted for 38.2%, 26.5%, 21.6%,
   11.2%, 2.0%, and 0.5%, respectively, of MGIC's new insurance written.

        To obtain primary insurance from MGIC, a mortgage lender must first
   apply for and receive a mortgage guaranty master policy ("Master Policy")
   from MGIC. MGIC had approximately 8,600 master policyholders at
   December 31, 1996 (not including policies issued to branches and
   affiliates of large lenders).  In 1996, MGIC issued coverage on mortgage
   loans for approximately 59% of its master policyholders.

        MGIC's top 10 customers generated 20.0% of its new insurance written
   in 1996, compared to 20.7% in 1995.  The largest single customer of MGIC
   (including branches and affiliates), measured by new insurance written,
   accounted for 3.0% of new insurance written during both 1996 and 1995. 
   MGIC's single largest customer, measured by insurance in force as of
   December 31, 1996, represented 3.5% of such insurance in force.

      Sales and Marketing and Competition 

        Sales and Marketing.  MGIC sells its insurance products through its
   own employees, located throughout the United States.  At December 31,
   1996, MGIC had 25 underwriting service centers located in 19 states and in
   Puerto Rico.

        Competition.  MGIC and other private mortgage insurers compete
   directly with federal and state governmental and quasi-governmental
   agencies, principally the FHA and, to a lesser degree, the Veterans
   Administration ("VA").  These agencies sponsor government-backed mortgage
   insurance programs, which during 1996 accounted for approximately 45%
   (compared to approximately 39% during 1995) of the total low down payment
   residential mortgages which were subject to governmental or private
   mortgage insurance.  See "Regulation , Indirect Regulation" below.

        In addition to competition from federal agencies, MGIC and other
   private mortgage insurers face competition from state-supported mortgage
   insurance funds in several states, including California, Illinois and New
   York. From time to time, other state legislatures and agencies consider
   expansions of the authority of their state governments to insure
   residential mortgages.

        MGIC and other private mortgage insurers also compete with mortgage
   lenders which self-insure against the risk of loss from defaults on all or
   a portion of their low down payment mortgage loans.

        The private mortgage insurance industry consists of nine active
   mortgage insurers (including a joint venture in which a mortgage insurer
   is one of the joint venturers).  During 1995 and 1996, MGIC was the
   largest private mortgage insurer based on new primary insurance written
   and at December 31, 1996, MGIC also had the largest book of direct primary
   insurance in force.

        The Company believes MGIC competes with other private mortgage
   insurers principally on the basis of the strength of its management team
   and field organization; its ability to meet lender needs by providing
   underwriting risk management, affordable housing, loss mitigation, capital
   markets and training support; effective use of technology and innovation
   in the delivery and servicing of MGIC's insurance products; and structured
   programs involving agency pool insurance, captive reinsurance and other
   programs in which insurance is offered on special terms for certain loans
   or groups of loans.  The Company believes MGIC's additional competitive
   strengths, compared to other private insurers, are its customer
   relationships, name recognition and reputation.

        Certain private mortgage insurers compete by offering lower premium
   rates than other companies, including MGIC, either in general or with
   respect to particular classes of business. MGIC on a case-by-case basis
   will adjust premium rates, generally depending on the risk
   characteristics, loss performance or class of business of the loans to be
   insured, or the costs associated with doing such business.

        Two other mortgage insurers, General Electric Mortgage Insurance
   Corporation ("GEMIC") and United Guaranty Residential Insurance Company,
   an affiliate of American International Group, Inc., have higher claims-
   paying ability ratings from S&P and Moody's than MGIC, principally based
   on having definitive capital support agreements from affiliated companies.

      Risk Management

      Risk Management Approach.  MGIC evaluates four major elements of risk:


      -   Individual Loan and Borrower.  Except to the extent its delegated
          underwriting program is being utilized as described below, MGIC
          evaluates insurance applications based on its analysis of the
          borrower's ability to repay the mortgage loan and the
          characteristics and value of the property.  The analysis of the
          borrower includes reviewing the borrower's housing and total debt
          ratios as well as the borrower's FICO credit score, as reported by
          credit reporting agencies.  In the case of delegated underwriting,
          compliance with program parameters is monitored by periodic audits
          of delegated business.

      -   Geographic Market.  MGIC places significant emphasis on the
          condition of the housing markets around the nation in determining
          its underwriting policies.

      -   Product.  The type of mortgage instrument that the borrower selects
          and the purpose of the loan are important factors in MGIC's
          analysis of mortgage default risk.  MGIC analyzes four general
          characteristics of the product to quantify this risk evaluation:
          (i) LTV ratio; (ii) type of loan instrument; (iii) type of
          property; and (iv) purpose of the loan.  In addition to its
          underwriting guidelines (as referred to below), pricing is MGIC's
          principal method used to manage these risks.  Loans with higher LTV
          ratios generally have a higher premium, as do instruments such as
          adjustable rate mortgage loans ("ARMs") and loans with a maturity
          longer than fifteen years.

      -   Mortgage Lender.  MGIC evaluates from time to time its major
          customers and the performance of their business which MGIC has
          insured.

      Based on historical performance, the Company believes that the claim
   incidence for loans with LTVs in excess of 90% but not more than 95% ("95%
   LTV loans") is substantially higher than for loans with LTV ratios of 90%
   or less; for ARMs during a prolonged period of rising interest rates would
   be substantially higher than for fixed rate loans; for loans in which the
   original loan amount exceeds $200,000 is higher than for loans where such
   amount is $200,000 or less; and for loans with FICO credit scores below
   620 is higher than for loans with FICO credit scores of 620 and above. 
   While there is no meaningful data on claim incidence for loans with LTVs
   in excess of 95% ("97% LTV loans") because this product has only been
   recently offered by the industry, the Company anticipates that claim
   incidence on 97% LTV loans will be higher than on 95% LTV loans.  MGIC
   charges higher premium rates for insuring 95% and 97% LTV loans and ARMs. 
   However, there can be no assurance that such higher rates adequately
   reflect the increased risk associated with those types of loans,
   particularly in a period of economic recession.

        There are also other types of loan characteristics relating to the
   individual loan or borrower which affect the risk potential for a loan. 
   The presence of a number of higher-risk characteristics in a loan
   materially increases the likelihood of a claim on such a loan unless there
   are other characteristics to lower the risk.

        Underwriting Process.  To obtain primary insurance on a specific
   mortgage loan, a master policyholder typically submits an application to
   an MGIC underwriting service center, supported by various documents, if
   required by MGIC.  MGIC utilizes national underwriting guidelines to
   evaluate the potential risk of default on mortgage loans submitted for
   insurance coverage.  These guidelines generally are consistent with
   Fannie Mae and Freddie Mac underwriting guidelines and take into account
   the applicable premium rates charged by MGIC and the loss experience of
   the private mortgage insurance industry, as well as the initiatives to
   expand home ownership opportunities undertaken by Fannie Mae and
   Freddie Mac.  MGIC's underwriters have discretionary authority to insure
   loans which deviate in one or more respects from MGIC's underwriting
   guidelines.  In most such cases, offsetting underwriting strengths must be
   identified.

        In order to react to local or regional economic conditions, MGIC has
   also developed for use by its underwriting staff certain modified
   guidelines which attempt to address particular regional or local market
   developments.  These "special market underwriting guidelines" are updated
   from time to time and deviate in varying degrees from MGIC's national
   guidelines based on MGIC's analysis of area housing markets and related
   economic indicators and conditions.  The special market underwriting
   guidelines are more liberal than the published national guidelines in some
   markets, but in other markets are more restrictive.

        To assist its staff of underwriters, MGIC utilizes a computer-
   assisted underwriting system which analyzes and approves certain mortgage
   insurance applications based on MGIC's underwriting standards, but without
   personal underwriter intervention, thereby allowing MGIC's underwriting
   staff to devote additional attention to evaluating more difficult
   underwriting decisions. MGIC audits a representative sample of
   applications approved by the system.

        Delegated Underwriting.  Delegated underwriting is a program whereby
   approved lenders are allowed to commit MGIC to insure loans utilizing
   their MGIC-approved underwriting guidelines and underwriting evaluation. 
   While MGIC does not underwrite on a case-by-case basis the credit of the
   borrower, the value of the property, or other factors which it normally
   considers in its underwriting decision, it does audit on a regular basis a
   sample of the loans insured. 

        At December 31, 1996, MGIC's delegated underwriting program involved
   662 lenders, including all of MGIC's top twenty customers.  Loans insured
   under MGIC's delegated underwriting program accounted for approximately
   30.7% of MGIC's total risk in force at December 31, 1996.  The percentage
   of new risk written by delegated underwriters increased to 41.0% in 1996
   from 38.2% in 1995, and 28.6% in 1994.  In mid-1996, MGIC introduced a
   program under which MGIC approves a loan for insurance if the borrower
   satisfies certain minimum criteria for credit scores and debt ratios.  As
   a result of this new program, which represented approximately 3.8% of new
   risk written in 1996, MGIC anticipates that the percentage of new risk
   written under the delegated underwriting program will decline in 1997. 
   The performance of loans insured under the delegated underwriting program
   has been comparable to MGIC's non-delegated business, although performance
   of that program has not yet been tested in a period of severe economic
   stress.

        Affordable Housing.  In recent years, MGIC has increased its
   insurance of residential mortgages identified by its customers as loans
   secured by properties owned and occupied by low- and moderate-income
   borrowers, or by borrowers who reside in areas targeted for community
   reinvestment or redevelopment ("affordable housing" loans).  The
   percentage of affordable housing loans designated as such by lenders was
   2.3% of new risk written in 1996, as compared to 4.9% in 1995.  The
   Company believes that affordable housing loans have higher risks than its
   other insured business.  Therefore, MGIC has instituted various programs
   seeking to mitigate the higher risk characteristics of such loans. 
   However, while early in the life of such lender-designated loans, on the
   basis of the limited information available, the Company believes that the
   default rate and claims rate on such loans will be higher than the average
   default rate and claims rate on the MGIC Book.

      Reinsurance 

        General. In each year from 1985 through 1993, MGIC had ceded certain
   percentages of its new insurance written under quota share reinsurance
   agreements with several international reinsurers.  Effective January 1,
   1994, MGIC reassumed from its principal reinsurer, European Reinsurance
   Company of Zurich ("European Re"), MGIC's mortgage insurance written in
   1985 through 1993, which had been ceded to European Re and discontinued
   quota share reinsurance for new insurance written. At December 31, 1996,
   approximately 3% of MGIC's insurance in force was reinsured.  Reinsuring
   against possible loan losses does not discharge MGIC from liability to a
   policyholder; however, the reinsurer agrees to indemnify MGIC for the
   reinsurer's share of losses incurred.
          Captive Mortgage Reinsurance. MGIC will reinsure with a mortgage
   reinsurance affiliate of a lender a portion of the risk on loans
   originated or purchased by the lender which have MGIC primary insurance.
   The amount of captive reinsurance ceded by MGIC to date has not been
   material.  In the fourth quarter of 1996, the Office of the Comptroller of
   the Currency ("OCC"), which regulates national banks and their
   subsidiaries, and the Office of Thrift Supervision ("OTS"), which
   regulates federally chartered savings institutions, separately announced
   that captive mortgage reinsurance was a permissible activity that could be
   conducted in operating subsidiaries after approval of an application made
   to those agencies.  As a result of the announcements by the OCC and the
   OTS, MGIC expects that it will enter into additional captive reinsurance
   arrangements. The Company understands that the Department of Housing and
   Urban Development ("HUD") is considering  whether captive mortgage
   reinsurance programs comply with the Real Estate Settlement Procedures Act
   of 1974, as amended, and the regulations thereunder ("RESPA"). There can
   be no assurance that HUD will not challenge captive mortgage reinsurance
   under RESPA or that captive mortgage reinsurance complies with RESPA.

      Past Industry Losses; Defaults; and Claims 

        Past Industry Losses.  The private mortgage insurance industry,
   including the WMAC Book, experienced substantial unanticipated incurred
   losses in the mid-to-late 1980s.  From the 1970s until 1981, rising home
   prices in the United States generally led to profitable insurance
   underwriting results for the industry and caused private mortgage insurers
   to emphasize market share.  To maximize market share, until the mid-1980s,
   private mortgage insurers employed liberal underwriting practices, and
   charged premium rates which, in retrospect, generally did not adequately
   reflect the risk assumed (particularly on pool insurance).  These industry
   practices compounded the losses which resulted from changing economic and
   market conditions which occurred during the early and mid-1980s, including
   (i) severe regional recessions and attendant declines in property values
   in the nation's energy producing states; (ii) the development by lenders
   of new mortgage products to defer the impact on home buyers of double
   digit mortgage interest rates; and (iii) changes in federal income tax
   incentives which initially encouraged the growth of investment in non-
   owner occupied properties.

        Defaults.  The claim cycle on private mortgage insurance begins with
   the insurer's receipt of notification of a default on an insured loan from
   the lender.  Lenders are required to notify MGIC of defaults within 130
   days after the initial default, although most lenders do so earlier.  The
   incidence of default is affected by a variety of factors, including the
   level of borrower income growth, unemployment, divorce and illness, the
   level of interest rates and general borrower creditworthiness.  Defaults
   that are not cured result in a claim to MGIC.  Defaults may be cured by
   the borrower bringing current the delinquent loan payments or by a sale of
   the property and the satisfaction of all amounts due under the mortgage.

        The following table shows the number of primary and pool loans
   insured in the MGIC Book, the related number of loans in default and the
   percentage of loans in default (default rate) as of the dates indicated: 

   
<TABLE>
    Default Statistics for the MGIC Book
   <CAPTION>

                                                                      December 31,

                                            1996            1995          1994           1993            1992

   <S>                                 <C>            <C>            <C>              <C>            <C>   
   PRIMARY INSURANCE                          

     Insured loans in force  . .       1,299,038      1,219,304      1,080,882        921,259        806,958
     Loans in default  . . . . .          25,034         19,980         15,439         13,658         13,082
     Percentage of loans in 
       default (default rate)  .           1.93%          1.64%          1.43%          1.48%          1.62%

   POOL INSURANCE
     Insured loans in force  . .          19,123         20,427         23,242         30,890         42,359
     Loans in default  . . . . .             855          1,053          1,097          1,419          1,225
     Percentage of loans in 
       default (default rate)  .           4.47%          5.15%          4.72%          4.59%          2.89%

   </TABLE>



        Although the number of primary loans in default increased from 1992
   through 1996 as a result of the continued growth and maturity of the MGIC
   Book, the default rate for primary loans declined during 1993 and 1994,
   due to the significant increase in new insurance written in 1993 and 1994
   and improved economic conditions in certain regions of the United States,
   as indicated in the table below.  The default rate for primary loans
   increased from 1994 through 1996 due to an increase in the risk profile of
   loans insured in late 1994 and the first half of 1995 and the continued
   maturation of MGIC's insurance in force.

        The percentage of pool insurance loans in default increased from 1992
   to 1995, as a result of the significant reduction in insured loans in
   force and continued economic difficulties in certain regions of the
   country.

        Regions of the United States may experience different default rates
   due to varying localized economic conditions from year to year.  The
   following table shows the percentage of the MGIC Book's primary loans in
   default by MGIC region at the dates indicated: 


                 Default Rates for Primary Insurance By Region*


                          Dec. 31,        Dec. 31,       Dec. 31,
                            1996            1995           1994  

    MGIC REGION: 
    New England . .         2.09%          2.17%           2.32%
    Northeast . . .          2.74           2.49           2.29
    Mid-Atlantic  .          1.96           1.64           1.45

    Southeast . . .          1.83           1.46           1.25
    Great Lakes . .          1.57           1.21           0.99
    North Central .          1.49           1.21           1.02
    South Central .          1.56           1.27           0.97
    Plains  . . . .          0.97           0.75           0.59
    Pacific . . . .          2.70           2.43           2.10
                                                             
       National . .         1.93%          1.64%           1.43%
  ____________________

   *  The default rate is affected by both the number of loans in default at
      any given date as well as the number of insured loans in force at such
      date.

        Claims.  Claims result from defaults which are not cured.  Whether a
   claim results from an uncured default principally depends on the
   borrower's equity in the home at the time of default and the borrower's
   (or the lender's) ability to sell the home for an amount sufficient to
   satisfy all amounts due under the mortgage.  Claims are affected by
   various factors, including local housing prices and employment levels, and
   interest rates.

        Under the terms of the Master Policy, the lender is required to file
   a claim for primary insurance with MGIC within 60 days after it has
   acquired good and marketable title to the underlying property through
   foreclosure.  Depending on the applicable state foreclosure law, an
   average of about 12 months transpires from the date of default to payment
   of a claim on an uncured default.  The claim amount generally averages
   about 115% of the unpaid principal amount of the loan.

        Within 60 days after the claim has been filed, MGIC has the option of
   either (i) paying the coverage percentage specified for that loan, with
   the insured retaining title to the underlying property and receiving all
   proceeds from the eventual sale of the property or (ii) paying 100% of the
   claim amount in exchange for the lender's conveyance of good and
   marketable title to the property to MGIC, with MGIC then selling the
   property for its own account.

        Claim activity is not evenly spread throughout the coverage period of
   a book of primary business.  Relatively few claims are received during the
   first two years following issuance of coverage on a loan.  This is
   followed by a period of rising claims which, based on industry experience,
   has historically reached its highest level in the third through fifth
   years after the year of loan origination.  Thereafter, the number of
   claims received has historically declined at a gradual rate, although the
   rate of decline can be affected by conditions in the economy, including
   lower housing price appreciation.  There can be no assurance that this
   historical pattern of claims will continue in the future.  Moreover, when
   a loan is refinanced, because the new loan replaces, and is a continuation
   of, an earlier loan, the pattern of claims frequency for that new loan may
   be different from the historical pattern of other loans.  As of
   December 31, 1996, 60.9% of the MGIC Book primary insurance in force had
   been written during 1994, 1995, and 1996, although a portion of such
   insurance arose from the refinancing of earlier originations.

        In addition to the increasing level of claim activity arising from
   the maturing of the MGIC Book, another important factor affecting MGIC
   Book losses is the amount of the average claim paid, which is generally
   referred to as claim severity.  The main determinants of claim severity
   are the amount of the mortgage loan and coverage percentage on the loan. 
   The average claim severity on the MGIC Book primary insurance was $21,817
   for 1996 as compared to $21,071 in 1995.  Although prior to 1995 the
   coverage percentage remained relatively constant on the MGIC Book, the
   Company anticipates that MGIC Book claim severity will likely increase
   over the long term due to the higher coverage percentages generally
   written beginning in 1995 as required by Fannie Mae and Freddie Mac.

      Loss Reserves 

        A significant period of time may elapse between the occurrence of the
   borrower's default on a mortgage payment (the event triggering a potential
   future claim payment by MGIC), the reporting of such default to MGIC and
   the eventual payment of the claim related to such uncured default.  To
   recognize the liability for unpaid losses related to outstanding reported
   defaults (known as the default inventory), the Company (similar to other
   private mortgage insurers) establishes loss reserves, representing the
   estimated percentage of defaults which will ultimately result in a claim
   (known as the claim rate), and estimates of the severity of each claim
   which will arise from the defaults included in the default inventory.  In
   accordance with industry accounting practices, the Company does not
   establish loss reserves for future claims on insured loans which are not
   currently in default.

        The Company also establishes reserves to provide for the estimated
   costs of settling claims, including legal and other fees, and general
   expenses of administering the claims settlement process ("loss adjustment
   expenses"), and for losses and loss adjustment expenses from defaults
   which have occurred, but which have not yet been reported to the insurer.

        The Company's reserving process is based upon the assumption that
   past experience, adjusted for the anticipated effect of current economic
   conditions and projected future economic trends, provides a reasonable
   basis for estimating future events.  However, estimation of loss reserves
   is a difficult process, especially in light of the rapidly changing
   economic conditions over the past few years in certain regions of the
   United States.  In addition, economic conditions that have affected the
   development of the loss reserves in the past may not necessarily affect
   development patterns in the future, in either a similar manner or degree.

        For a further description of loss reserves, see Note 6 to the
   consolidated financial statements of the Company, included in Exhibit 13
   to this Annual Report on Form 10-K.

      Geographic Dispersion 

        The following table reflects the percentage of primary risk in force
   in the top 10 states and top 10 metropolitan statistical areas ("MSAs")
   for the MGIC Book at December 31, 1996:


             Dispersion of Primary Risk in Force

      Top 10 States                   Top 10 MSAs

   1.   California       13.1%           1.   Chicago            4.3%
   2.   Texas             6.8            2.   Boston             3.7
   3.   Illinois          5.9            3.   Los Angeles        3.3
   4.   Michigan          5.6            4.   Washington, DC     3.1
   5.   Ohio              4.5            5.   Detroit            2.3
   6.   New York          4.4            6.   Atlanta            2.3
   7.   Florida           4.1            7.   Philadelphia       2.1
   8.   Pennsylvania      4.0            8.   Dallas             1.9
   9.   Massachusetts     3.8            9.   Orange County      1.6
   10.  New Jersey        3.6           10.   Houston            1.6
                         -----                                  -----
      Total              55.8%          Total                   26.2%
                         =====                                  =====


      The percentages shown above for various MSAs can be affected by
   changes, from time to time, in the federal government's definition of an
   MSA.

      Insurance in Force by Policy Year

        The following table sets forth the dispersion of MGIC's primary
   insurance in force as of December 31, 1996, by year of policy origination
   since MGIC began operations on March 1, 1985:

        Primary Insurance In Force by Policy Year

                          Primary
                        Insurance in         Percent of
    Policy Year             Force              Total   
                   (In millions of dollars)
    1985-1990            $   9,574              7.3%
    1991                   4,198                3.2
    1992                   12,790               9.7
    1993                   24,785               18.9
    1994                   24,249               18.5
    1995                   26,570               20.2
    1996                    29,231             22.2    

      Total               $131,397             100.0%


      Product Characteristics of Risk in Force

        At December 31, 1996 and 1995, 99.2% and 99.0%, respectively, of
   MGIC's risk in force was primary insurance and the remaining risk in force
   was pool insurance.  The following table reflects at the dates indicated
   the (i) total dollar amount of primary risk in force for the MGIC Book and
   (ii) percentage of such primary risk in force (as determined on the basis
   of information available on the date of mortgage origination) by the
   categories indicated.

                    Characteristics of Primary Risk in Force

                                               December 31,   December 31,
                                                   1996           1995     

   Direct Risk in Force 
     (Dollars in Millions) . . . . .          $29,308            $25,502

   Lender Concentration:
     Top 10 lenders  . . . . . . . .             17.9%              16.9%
     Top 20 lenders  . . . . . . . .             28.1%              25.6%

   LTV:(1)
     95s(2)  . . . . . . . . . . . .             43.5%              39.6%
     90s(3)  . . . . . . . . . . . .             56.2               60.2
     80s . . . . . . . . . . . . . .              0.3                0.2
                                               ------              ------
       Total . . . . . . . . . . . .            100.0%             100.0%
                                               ======              ======
   Loan Type:
     Fixed(4)  . . . . . . . . . . .             71.5%              70.5%
     ARM(5)  . . . . . . . . . . . .             25.0               26.0
     Balloon(6)  . . . . . . . . . .              3.4                3.4
     Other(7)  . . . . . . . . . . .              0.1                0.1
                                               ------              ------
       Total . . . . . . . . . . . .            100.0%             100.0%
                                               ======              ======
   Original Insured Loan Amount:
     $200,000 and less   . . . . . .             87.8%              89.1%
   Over $200,000   . . . . . . . . .             12.2               10.9 
                                               ------              ------
                                                100.0%             100.0%
   Mortgage Term:
     15-years and under  . . . . . .              5.3%               6.5%
     Over 15 years . . . . . . . . .             94.7               93.5 
                                                ------             ------
       Total . . . . . . . . . . . .            100.0%             100.0%
                                                ======             ======
   Property Type:
     Single-family(8)  . . . . . . .             93.4%              93.3%
     Condominium . . . . . . . . . .              6.1                6.2 
     Other(9)  . . . . . . . . . . .              0.5                0.5 
                                                ------             ------
       Total . . . . . . . . . . . .            100.0%             100.0%
                                                ======             ======
   Occupancy Status:
     Primary residence . . . . . . .             99.0%              99.3%
     Second home . . . . . . . . . .              0.8                0.6
     Non-owner occupied  . . . . . .              0.2                0.1
                                               ------              ------
       Total . . . . . . . . . . . .            100.0%             100.0%
                                                ======             ======
   ____________________

   (1)  Loan-to-value represents the ratio (expressed as a percentage) of the
        dollar amount of the mortgage loan to the value of the property at
        the time the loan became insured.  They are identified as in excess
        of 90% LTV ("95s"); in excess of 80% LTV and up to 90% LTV ("90s");
        and equal to or less than 80% LTV ("80s").

   (2)  Includes 97% LTV loans, which were 1.7% and 1.0%, respectively, of
        primary risk in force at December 31, 1996 and 1995.

   (3)  MGIC includes in its classification of 90s, loans where the borrower
        makes a down payment of 10% and finances the associated mortgage
        insurance premium payment as part of the mortgage loan.  At
        December 31, 1996 and 1995, 3.7% and 4.5%, respectively, of the
        primary risk in force consisted of these types of loans.

   (4)  Includes fixed rate mortgages with temporary buydowns (where in
        effect, the applicable interest rate is typically reduced by one or
        two percentage points during the first two years of the loan).

   (5)  Includes ARMs where payments adjust fully with interest rate
        adjustments.  Also includes ARMs with negative amortization, which at
        December 31, 1996 and 1995, represented 2.2% and 2.4%, respectively,
        of primary risk in force.  As of December 31, 1996 and 1995, ARMs
        with LTVs in excess of 90% represented 9.2% and 8.4%, respectively,
        of primary risk in force.

   (6)  Balloon payment mortgages are loans with a maturity, typically five
        to seven years, that is shorter than the loans' amortization period.

   (7)  Primarily includes graduated payment mortgages (loans with scheduled
        increases in monthly payments to shorten the loans' maturity).

   (8)  Includes townhouse-style attached housing with fee simple ownership.

   (9)  Includes cooperatives and manufactured homes deemed to be real
        estate.


   C.  The WMAC Book 

         The WMAC Book is in a "run-off" status and no new insurance has been
   written on the WMAC Book since February 28, 1985, other than pursuant to
   then existing agreements.  In connection with the Acquisition, 100% of the
   WMAC Book was reinsured with several international reinsurers (the "WMAC
   Reinsurers"), and one of the WMAC Reinsurers retroceded a 20% quota share
   of the reinsurance on the WMAC Book to a subsidiary of the Company.  In
   September, 1996, MGIC assumed from one of the WMAC Reinsurers all of such
   Reinsurer's reinsurance interest in the WMAC Book.  As a result of these
   transactions and another transaction with a WMAC Reinsurer, at
   December 31, 1996, MGIC had an approximately 65% interest in renewal
   premiums and losses from the WMAC Book and had approximately $1.3 billion
   of risk in force from the WMAC Book.  MGIC is administering the WMAC Book,
   collecting renewal premiums, administering claims on behalf of WMAC and
   advancing funds for the payment of claims on behalf of WMAC pursuant to a
   management agreement with WMAC.

   D.  Other Business 

        The Company, through certain non-insurance subsidiaries, provides
   various mortgage services for the mortgage finance industry, such as
   contract underwriting, premium reconciliation and claims administration
   for the Department of Housing and Urban Development and the Resolution
   Trust Corporation, respectively, and secondary marketing of mortgage-
   related assets. The Company owns approximately 48% of Credit-Based Asset
   Servicing and Securitization LLC ("C-BASS"), which began operations in
   mid-1996.  C-BASS was formed to acquire, sell and service distressed and
   other types of residential whole loan mortgage assets and to acquire and
   sell certain classes of mortgage-backed securities.  The revenues
   recognized from these mortgage services operations, other non-insurance
   services and C-BASS represented 3.0% and 3.6% of the Company's
   consolidated revenues in 1996 and 1995, respectively.

   E.  Investment Portfolio 

      Policy and Strategy 

        Cash flow from the Company's investment portfolio represented
   approximately 29% of its total cash flow from operations during 1996.  The
   Company's long-term investment portfolio is managed by a subsidiary of The
   Northwestern Mutual Life Insurance Company, although the Company maintains
   overall control of investment policy and strategy.  The Company maintains
   direct management of its short-term investment portfolio.

        The Company's current policies emphasize preservation of capital, as
   well as total return. Therefore, the Company's investment portfolio
   consists of high-quality, fixed-income investments. Liquidity is sought
   through diversification and investment in publicly traded securities.  The
   Company attempts to maintain a level of liquidity commensurate with its
   perceived business outlook and the expected timing, direction and degree
   of changes in interest rates.  The Company's investment policies in effect
   at December 31, 1996, limited investments in the securities of a single
   issuer (other than the U.S. government and its agencies).  The Company's
   investment policies in effect at December 31, 1996, did not permit
   purchasing securities rated below "A."

        At December 31, 1996, based on amortized cost value, approximately
   98.6% of the Company's total investment portfolio was invested in
   securities rated "A" or better, with 53.1% which were rated "AAA" and
   20.5% which were rated "AA," in each case by at least one nationally
   recognized securities rating organization.

        The Company's investment policies and strategies are subject to
   change depending upon regulatory, economic and market conditions and the
   existing or anticipated financial condition and operating requirements,
   including the tax position, of the Company.

      Investment Operations 

        At December 31, 1996, the consolidated book value (which is equal to
   market value) of the Company's investment portfolio was $2.0 billion.  At
   December 31, 1996, municipal securities represented 70.0% of the book
   value of the total investment portfolio.  Securities due within one year,
   within five to ten years, and after ten years, represented 8.8%, 42.8% and
   38.2%, respectively, of such total book value.

        The Company's net pre-tax investment income was $105.4 million for
   the year ended December 31, 1996, representing an after-tax yield of 5.1%
   for the year, a decline from 5.2% for 1995, resulting from a decline in
   the average interest rate on investments in 1996 as compared to 1995.

        For further information concerning investment operations, see Note 4
   to the consolidated financial statements of the Company, included in
   Exhibit 13 to this Annual Report on Form 10-K.

   F.  Regulation

      Direct Regulation

        The Company and its insurance subsidiaries, including MGIC, are
   subject to regulation, principally for the protection of policyholders, by
   the insurance departments of the various states in which each is licensed
   to do business.  The nature and extent of such regulation varies, but
   generally depends on statutes which delegate regulatory, supervisory and
   administrative powers to state insurance commissioners.

        In general, such regulation relates, among other things, to licenses
   to transact business; policy forms; premium rates; annual and other
   reports on financial condition; the basis upon which assets and
   liabilities must be stated; requirements regarding contingency reserves
   equal to 50% of premiums earned; minimum capital levels and adequacy
   ratios; reinsurance requirements; limitations on the types of investment
   instruments which may be held in an investment portfolio; the size of
   risks and limits on coverage of individual risks which may be insured;
   deposits of securities; limits on dividends payable; and claims handling. 
   Most states also regulate transactions between insurance companies and
   their parents or affiliates.  For a description of limits on dividends
   payable, see Note 10 to the consolidated financial statements of the
   Company, included in Exhibit 13 to this Annual Report on Form 10-K.

        Mortgage insurance premium rates are also subject to state regulation
   to protect policyholders against the adverse effects of excessive,
   inadequate or unfairly discriminatory rates and to encourage competition
   in the insurance marketplace.  Any increase in premium rates must be
   justified, generally on the basis of the insurer's loss experience,
   expenses and future trend analysis. The general mortgage default
   experience may also be considered.  Premium rates are subject to review
   and challenge by state regulators.  Legislatures and state insurance
   departments generally allow private mortgage insurers to insure
   residential loans with LTVs of up to 97%.

        A number of states generally limit the amount of insurance risk which
   may be written by a private mortgage insurer to 25 times the insurer's
   total policyholders' reserves, commonly known as the "risk-to-capital"
   requirement.

        MGIC is required to contribute to a contingency loss reserve an
   amount equal to 50% of earned premiums.  Such amounts cannot be withdrawn
   for a period of 10 years, except under certain circumstances.

        Mortgage insurers are generally single-line companies, restricted to
   writing residential mortgage insurance business only.  This essentially
   prohibits MGIC from using its capital resources in support of other types
   of insurance or non-insurance business.  Although the Company, as an
   insurance holding company, is prohibited from engaging in certain
   transactions with MGIC without submission to and, in some instances, prior
   approval of applicable insurance departments, the Company is not subject
   to insurance company regulation on its non-insurance businesses.

        Regulation of reinsurance varies by state.  Except for Wisconsin, New
   York and California, most states have no special restrictions on
   reinsurance that would apply to private mortgage insurers other than
   standard reinsurance requirements applicable to property and casualty
   insurance companies.  Standard reinsurance requirements generally involve
   the "admitting" or approving of reinsurers doing business in a particular
   state.  Special restrictions, including trust fund or letter of credit
   requirements, may apply to reinsurance arrangements with reinsurers which
   are foreign or not admitted.

        As the most significant purchasers and sellers of conventional
   mortgage loans and beneficiaries of private mortgage insurance, Freddie
   Mac and Fannie Mae impose requirements on private mortgage insurers in
   order for such insurers to be eligible to insure loans sold to such
   agencies.  These requirements of Freddie Mac and Fannie Mae are subject to
   change from time to time.  Currently, MGIC is an approved mortgage insurer
   for both Freddie Mac and Fannie Mae. To the extent Fannie Mae or Freddie
   Mac implements new eligibility requirements for mortgage insurers, changes
   current guarantee fee arrangements, allows alternative credit enhancement,
   or alters or liberalizes underwriting guidelines on low down payment
   mortgages they purchase, private mortgage insurers, including MGIC, are
   likely to respond to or comply with such actions in order to maintain
   market share of new insurance written.

        Fannie Mae has issued primary mortgage insurance master policy
   guidelines applicable to MGIC and all other Fannie Mae-approved private
   mortgage insurers, establishing certain minimum terms of coverage
   necessary in order for an insurer to be eligible to insure loans purchased
   by Fannie Mae.  The terms of MGIC's Master Policy comply with these
   guidelines.

        Certain proposed legislation regarding cancellation of mortgage
   insurance is discussed at "The MGIC Book - Types of Product - Primary
   Insurance" above.

      Indirect Regulation

        The Company and MGIC are also indirectly, but significantly, impacted
   by regulations affecting purchasers of mortgage loans, such as Freddie Mac
   and Fannie Mae, and regulations affecting governmental insurers, such as
   the FHA and VA, and lenders.  Private mortgage insurers, including MGIC,
   are highly dependent upon federal housing legislation and other laws and
   regulations to the extent they affect the demand for private mortgage
   insurance and the housing market generally.  From time to time, those laws
   and regulations have been amended so as to change competition from
   government agencies, particularly FHA.  Various proposals are discussed
   from time to time by Congress and certain federal agencies to reform or
   modify the FHA, but the scope and content of any such proposals, and
   whether they will be enacted into law, and their effect on MGIC cannot be
   predicted.

        During 1995, Fannie Mae and Freddie Mac each introduced their own
   automated underwriting systems which may be used by originators selling
   loans to them.  As a result of these new systems and for other reasons,
   the process by which mortgage originators sell loans to Fannie Mae and
   Freddie Mac is becoming increasingly automated, a trend MGIC expects to
   continue.  The selection of a private mortgage insurer is a decision that
   has traditionally been made by the mortgage loan originator who, for loans
   sold to Fannie Mae and Freddie Mac, may choose any insurer meeting their
   eligibility requirements.  As a result of continuing automation, Fannie
   Mae and Freddie Mac could develop the capability to supplant the mortgage
   originator as the person making the insurance purchasing decision,
   although MGIC is not aware that either Fannie Mae or Freddie Mac has any
   plans to do so.  The concentration of purchasing power that would be
   attendant if such development in fact occurred could adversely affect,
   from the Company's perspective, the terms on which mortgage insurance is
   written on loans sold to Fannie Mae and Freddie Mac.

        RESPA applies to most residential mortgage loans insured by MGIC, and
   regulations thereunder provide that mortgage insurance is a "settlement
   service" for purposes of mortgage loans subject to RESPA.  Subject to
   certain exceptions, RESPA prohibits certain payments in money or other
   forms by providers of settlement services to their customers, such as
   mortgage lenders, in return for the referral of business to the provider.

        The OTS, the OCC, the Federal Reserve Board, and the Federal Deposit
   Insurance Corporation have uniform guidelines on real estate lending by
   insured lending institutions under their supervision.  The guidelines
   specify that a residential mortgage loan originated with an LTV of 90% or
   greater should have appropriate credit enhancement in the form of mortgage
   insurance or readily marketable collateral, although no depth of coverage
   percentage is specified in the guidelines.

        Since 1989, OTS has had in effect its risk-based capital rules for
   savings institutions which establish a lower capital requirement if a low
   down payment loan is insured with private mortgage insurance, as opposed
   to being self-insured.  To the extent risk-based capital rules for savings
   institutions are changed in the future, or if, as has been proposed by
   some plans, the functions and authority of the OTS are transferred to, or
   consolidated with, other federal banking agencies, and such actions do not
   continue to provide for favorable capital treatment for privately insured
   mortgage loans, some or all of the benefits of OTS' risk-based capital
   rules to MGIC and the mortgage insurance industry may be curtailed or
   eliminated.

        Lenders are subject to various laws, including the Home Mortgage
   Disclosure Act, the Community Reinvestment Act and the Fair Housing Act,
   and Fannie Mae and Freddie Mac are subject to various laws, including laws
   relating to government sponsored enterprises, which may impose obligations
   or create incentives for increased lending to low and moderate income
   persons, or in targeted areas.

        There can be no assurance that other federal laws and regulations
   affecting such institutions and entities will not change, or that new
   legislation or regulations will not be adopted, which will adversely
   affect the demand for private mortgage insurance.

      Employees 

        At December 31, 1996, the Company had 1,026 full- and part-time
   employees, of whom 660 were assigned to its Milwaukee headquarters and 366
   were assigned to its field offices.


 
  Item 2.  Properties.

      Properties 

        At December 31, 1996, the Company leased office space in various
   cities throughout the United States comprising 122,000 square feet under
   leases expiring between 1997 and 2002 and which require annual rentals of
   $2.0 million in 1997.

        The Company owns its headquarters facility in downtown Milwaukee,
   Wisconsin which contains approximately 253,000 square feet of space.  The
   Company also owns a 90,000 square foot office/warehouse facility in
   Milwaukee.

        The Company maintains two mainframe computers at its corporate data
   center located in its headquarters building to support its data processing
   requirements for accounting, claims, marketing, risk management,
   underwriting and non-insurance operations.  The Company has in place back
   up procedures in the event of emergency situations.


   Item 3.  Legal Proceedings.

        Information concerning certain legal proceedings involving the
   Company and its subsidiaries is included in Notes 9 and 12 to the
   consolidated financial statements, included in Exhibit 13 to this Annual
   Report on Form 10-K, which Notes are incorporated herein by reference.


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

        None

                               Executive Officers

        Certain information with respect to the Company's executive officers
   as of March 1, 1997 is set forth below:

   Name and Age                                Title

   William H. Lacy, 52 . . . .    President and Chief Executive Officer of
                                  the Company and Chairman of the Board and
                                  Chief Executive Officer of MGIC; Director
                                  of the Company and MGIC

   Curt S. Culver, 44  . . . .    President and Chief Operating Officer of
                                  MGIC and Executive Vice President of the
                                  Company

   J. Michael Lauer, 52  . . .    Executive Vice President and Chief
                                  Financial Officer of the Company and MGIC

   Lawrence J. Pierzchalski, 
     44 . . . . . . . .  . . .    Executive Vice President,Risk Management
                                  of MGIC

   Gordon H. Steinbach, 51 . .    Executive Vice President,Credit Policy of
                                  MGIC

   Jeffrey H. Lane, 47 . . . .    Senior Vice President, General Counsel and
                                  Secretary of the Company and MGIC

   James S. MacLeod, 49  . . .    Senior Vice President,Field Operations of
                                  MGIC 

        Mr. Lacy has served as President and Chief Executive Officer of the
   Company since October 1987 and Chairman of the Board and Chief Executive
   Officer of MGIC since May 1996. He was Executive Vice President and Chief
   Operating Officer of the Company from March 1985 to October 1987.  He was
   President and Chief Executive Officer of MGIC from March 1985 to May 1996.

        Mr. Culver has served as President and Chief Operating Officer of
   MGIC and Executive Vice President of the Company since May 1996.  Mr.
   Culver served as Executive Vice President+Marketing and Field Operations
   of MGIC from January 1995 to May 1996; was Executive Vice
   President+Marketing of MGIC from May 1993 to January 1995; was Executive
   Vice President-Corporate Development of MGIC from July 1992 to May 1993,
   and was Senior Vice President-Office of the President of MGIC from January
   1991 to July 1992.  He was Senior Vice President-Marketing of MGIC from
   April 1988 to January 1991 and held various management positions with MGIC
   in the areas of marketing and sales from March 1985 to April 1988.

        Mr. Lauer has served as Executive Vice President and Chief Financial
   Officer of the Company and MGIC since March 1989.

        Mr. Pierzchalski has served as  Executive Vice President-Risk
   Management of MGIC since May 1996.  He served as Senior Vice President-
   Risk Management of MGIC from July 1992 to May 1996.  He was Vice
   President-Risk Management from April 1990 to July 1992, and held various
   management positions with MGIC in the areas of market research, corporate
   planning and risk management from March 1985 to April 1990.

        Mr. Steinbach has served as Executive Vice President-Credit Policy of
   MGIC since October 1996.  He served as the Executive Vice President-
   Affordable Housing and Claims of MGIC from July, 1992 to October 1996 and
   was Executive Vice President-Risk Management/Claims of MGIC from April
   1991 to July, 1992.  He was Executive Vice President-Risk Management of
   MGIC from March 1988 to April 1991, Senior Vice President-Risk Management
   of MGIC from May 1986 to March 1988 and Senior Vice President-Underwriting
   from March 1985 to May 1986.

        Mr. Lane has served as Senior Vice President, General Counsel and
   Secretary of the Company and MGIC since August 1996.  For more than five
   years prior to his joining the Company, Mr. Lane was a partner of Foley &
   Lardner, a law firm headquartered in Milwaukee, Wisconsin.

        Mr. MacLeod was appointed Senior Vice President - Field Operations of
   MGIC in May 1996 and was Senior Vice President - Sales of MGIC from
   January 1995 to May 1996.  He served as Senior Vice President - Business
   Development Operations of MGIC from October 1994 to January 1995.  Prior
   thereto he was Senior Vice President - Office of the President of MGIC
   from May 1993 to October 1994; was Senior Vice President - Marketing of
   MGIC from January 1991 to May 1993; was Senior Vice President - Division
   Manager of MGIC from July 1987 to January 1991 and had held various
   management positions with MGIC in the areas of underwriting and risk
   management from March 1985 to July 1987.



                                     PART II



   Item 5.    Market for Registrant's Common Equity and Related Stockholder
              Market

                  The information set forth under the caption "MGIC Stock" in
                  Exhibit 13 to this Annual Report on Form 10-K is
                  incorporated herein by reference.


   Item 6.    Selected Financial Data.

                  The information set forth in the tables under the caption
                  "Five-Year Summary of Financial Information" in Exhibit 13
                  to this Annual Report on Form 10-K is hereby incorporated
                  by reference in answer to this Item.


   Item 7.    Management's Discussion and Analysis of Financial Condition and
              Results of Operations.

                  The information set forth under the caption "Management's
                  Discussion and Analysis" in Exhibit 13 to this Annual
                  Report on Form 10-K is hereby incorporated by reference in
                  answer to this Item.


   Item 8.    Financial Statements and Supplementary Data.

                  The consolidated statements of operations, of shareholders'
                  equity and of cash flows for each of the years in the
                  three-year period ended December 31, 1996, and the related
                  consolidated balance sheet of the Company as of
                  December 31, 1996 and 1995, together with the related notes
                  thereto and the report of independent accountants, as well
                  as the unaudited quarterly financial data, all set forth in
                  Exhibit 13 to this Annual Report on Form 10-K, are hereby
                  incorporated by reference in answer to this Item.


   Item 9.    Changes in and Disagreements with Accountants on Accounting and
              Financial Disclosure.

                  None.


                                    PART III



   Item 10.  Directors and Executive Officers of the Registrant.

                  The information on the Directors of the Registrant is
                  included in the Company's Proxy Statement for the 1997
                  Annual Meeting of Shareholders, and is hereby incorporated
                  by reference.  The information on the Executive Officers of
                  the Registrant appears at the end of Part I of this
                  Form 10-K.


   Item 11.  Executive Compensation.

                  This information is included in the Company's Proxy
                  Statement for the 1997 Annual Meeting of Shareholders
                  (other than information covered by Instruction (9) to
                  Item 402(a) of Regulation S-K of the Securities and
                  Exchange Commission), and is hereby incorporated by
                  reference.


   Item 12.  Security Ownership of Certain Beneficial Owners and Management.

                  This information is included in the Company's Proxy
                  Statement for the 1997 Annual Meeting of Shareholders, and
                  is hereby incorporated by reference.


   Item 13.  Certain Relationships and Related Transactions.

                  This information is included in the Company's Proxy
                  Statement for the 1997 Annual Meeting of Shareholders, and
                  is hereby incorporated by reference.


                                     PART IV


   Item 14.   Exhibits, Financial Statement Schedules, and Reports on Form 
              8-K.

        (a)  1.   Financial statements , The financial statements listed in
                  the accompanying Index to Consolidated Financial Statements
                  and Financial Statement Schedules are filed as part of this
                  Form 10-K.

             2.   Financial statement schedules , The financial statement
                  schedules listed in the accompanying Index to Consolidated
                  Financial Statements and Financial Statement Schedules are
                  filed as part of this Form 10-K.

             3.   Exhibits , The accompanying Index to Exhibits is
                  incorporated by reference in answer to this portion of this
                  Item and the Exhibits listed in such Index are filed as
                  part of this Form 10-K.

        (b)  Reports on Form 8-K

             No reports on Form 8-K were filed during the quarter ended
             December 31, 1996.

                   INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
                        AND FINANCIAL STATEMENT SCHEDULES

                              [Item 14(a) 1 and 2]

   Consolidated Financial Statements (all contained in Exhibit 13 to this
   Annual Report on Form 10-K)

   Consolidated statement of operations for each of the three years in the
   period ended December 31, 1996

   Consolidated balance sheet at December 31, 1996 and 1995

   Consolidated statement of shareholders' equity for each of the three years
   in the period ended December 31, 1996

   Consolidated statement of cash flows for each of the three years in the
   period ended December 31, 1996


   Notes to consolidated financial statements

 
  Report of independent accountants

   Financial Statement Schedules (all contained immediately following the
   signature page to this Annual Report on Form 10-K)


   Report of independent accountants on financial statement schedules

   Schedules at and for the specified years in the three-year period ended
   December 31, 1996:

   Schedule I     -     Summary of investments - other than investments in
                        related parties

   Schedule II    -     Condensed financial information of Registrant

   Schedule IV    -     Reinsurance

   All other schedules are omitted since the required information is not
   present or is not present in amounts sufficient to require submission of
   the schedules, or because the information required is included in the
   consolidated financial statements and notes thereto.


   
<PAGE>


                                   SIGNATURES

   Pursuant to the requirements of Section 13 or 15(d) of the Securities
   Exchange Act of 1934, the registrant has duly caused this report to be
   signed on its behalf by the undersigned, thereunto duly authorized, on
   March 14, 1997.


   MGIC INVESTMENT CORPORATION

   By  /s/ William H. Lacy                      
       William H. Lacy
       President and Chief Executive Officer

   Pursuant to the requirements of the Securities Exchange Act of 1934, this
   report has been signed below as of the date set forth above by the
   following persons on behalf of the registrant and in the capacities
   indicated.

   Name and Title


   /s/ William H. Lacy
   William H. Lacy
   President, Chief Executive Officer and
     Director 


   /s/ J. Michael Lauer
   J. Michael Lauer
   Executive Vice President and 
     Chief Financial Officer
   (Principal Financial Officer)


   /s/ Patrick Sinks
   Patrick Sinks
   Vice President, Controller and
     Chief Accounting Officer
   (Principal Accounting Officer)


   /s/ James A. Abbott
   James A. Abbott
   James A. Abbott, Director


   /s/ Mary K. Bush
   Mary K. Bush, Director


   
   Karl E. Case, Director


   /s/ David S. Engleman
   David S. Engelman
   David S. Engelman, Director


   /s/ James D. Ericson
   James D. Ericson, Director


   /s/ Kenneth M. Jastrow, II
   Kenneth M. Jastrow, II, Director


   /s/ Sheldon B. Lubar
   Sheldon B. Lubar, Director


   /s/ William A. McIntosh
   William A. McIntosh, Director


   /s/ Leslie M. Muma
   Leslie M. Muma, Director


   /s/ Wayne J. Roper
   Wayne J. Roper, Director


   /s/ Peter J. Wallison
   Peter J. Wallison, Director


   /s/ Edward J. Zore
   Edward J. Zore, Director

   
<PAGE>

                                      100 East Wisconsin Avenue
                                      Telephone 414 276 9500
                                      Suite 1500
                                      Milwaukee,  WI  53202

   PRICE WATERHOUSE LLP



                      Report of Independent Accountants on
                          Financial Statement Schedules


   To the Board of Directors
   of MGIC Investment Corporation


   Our audits of the consolidated financial statements referred to in our
   report dated January 8, 1997 appearing on page 27 of the 1996 Annual
   Report to Shareholders of MGIC Investment Corporation (which report and
   consolidated financial statements are incorporated by reference in this
   Annual Report on Form 10-K) also included audits of the Financial
   Statement Schedules listed in Item 14(a) of this Form 10-K.  In our
   opinion, these Financial Statement Schedules present fairly, in all
   material respects, the information set forth therein when read in
   conjunction with the related consolidated financial statements.


   PRICE WATERHOUSE LLP

   Milwaukee, Wisconsin
   January 8, 1997


   
<PAGE>


                           MGIC INVESTMENT CORPORATION

                      SCHEDULE I - SUMMARY OF INVESTMENTS -
                    OTHER THAN INVESTMENTS IN RELATED PARTIES

                                December 31, 1996

                                                                  Amount at
                                                               which shown in
                                         Amortized     Market    the balance
                                           Cost         Value       sheet
          Type of Investment                  (In thousands of dollars)
    
   Fixed maturities:                                           
      Bonds:                                                   
          United States Government 
            and government agencies 
            and authorities                $77,498      $78,636     $78,636
          States, municipalities and 
            political subdivisions        1,364,790   1,420,727   1,420,727
          Foreign governments                13,966      14,391      14,391
          Public utilities                   56,262      56,629      56,629
          All other corporate bonds         312,355     314,083     314,083
      Redeemable preferred stocks             7,322       7,615       7,615
                                          ---------  ----------   ---------
            Total fixed maturities        1,832,193   1,892,081   1,892,081
                                                               
   Equity securities:                                          
      Common stocks:                                           
          Banks, trust and insurance 
            companies                        1,333       4,039        4,039
                                          ---------   ---------   ---------
            Total equity securities          1,333       4,039        4,039
                                          ---------   ---------   ---------
   Short-term investments                   140,114    140,114      140,114
                                          ---------   ---------   ---------
            Total investments           $1,973,640  $2,036,234   $2,036,234
                                         ==========  ==========  ==========

   
<PAGE>

                           MGIC INVESTMENT CORPORATION

           SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                             CONDENSED BALANCE SHEET
                               PARENT COMPANY ONLY

                           December 31, 1996 and 1995


                                            1996          1995
                                       (In thousands of dollars)
   ASSETS                                      

   Investment portfolio, at 
     market value:                              
       Fixed maturities                      $20,211      $  17,798 
       Equity securities                          -              30 
       Short-term investments                  4,683          4,120 
                                          ----------     ----------
         Total investment portfolio           24,894         21,948 
                                                 
   Cash                                            7              9 
   Investment in subsidiaries, 
     at equity in net assets               1,341,206      1,104,455 
   Income taxes receivable - 
     affiliates                               12,088          5,645 
   Accrued investment income                     260            278 
   Other assets                                   16              - 
                                          ----------     ----------

         Total assets                     $1,378,471    $ 1,132,335 
                                          ==========     ==========
                                                
   LIABILITIES AND SHAREHOLDERS' 
   EQUITY                                       

   Liabilities:                                 
     Accounts payable - 
       affiliates                            $12,356        $10,943 
                                          ----------     ----------
                                                
   Shareholders' equity (note B):               
     Common stock, $1 par value, 
       shares authorized 150,000,000; 
       shares issued 60,555,400;
       outstanding 1996 - 58,950,434; 
       1995 - 58,629,420                      60,555         60,555 
     Paid-in surplus                         268,540        259,430 
     Treasury stock (shares at cost, 
       1996 - 1,604,966; 1995 - 
       1,925,980)                             (7,073)        (8,172)
     Unrealized appreciation in 
       investment portfolio of
       subsidiaries, net of tax               40,685         54,737 
     Retained earnings                     1,003,408        754,842 
                                          ----------     ----------
         Total shareholders' equity        1,366,115      1,121,392 
                                          ----------     ----------
         Total liabilities and 
         shareholders' equity             $1,378,471     $1,132,335 
                                          ==========     ==========
                                                
                                                
   See accompanying supplementary notes to Parent Company condensed financial
                                   statements.

   
<PAGE>

                           MGIC INVESTMENT CORPORATION

           SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                        CONDENSED STATEMENT OF OPERATIONS
                               PARENT COMPANY ONLY
                  Years Ended December 31, 1996, 1995 and 1994

                                         1996       1995     1994
                                                
                                         (In thousands of dollars)

   Revenue:
      Equity in undistributed 
        net income of subsidiaries    $240,631  $186,184   $153,756
      Dividends received from 
        subsidiaries                    16,349    20,521      4,802
      Investment income, net             1,256       902      1,048
      Realized investment (losses) 
        gains, net                         (32)       42          - 
      Other income                           3         -          - 
                                     ---------   --------   --------

          Total revenue                258,207   207,649    159,606
                                     ---------   --------   --------
   Expenses:                                  
      Operating expenses                   216        84         93
                                     ---------   --------   --------
          Total expenses                   216        84         93
                                     ---------   --------   --------
   Income before tax                   257,991   207,565    159,513

   Credit for income tax                     -         -         (5)
                                     ---------   --------   --------
   Net income                        $ 257,991  $207,565  $ 159,518
                                     =========   =========  ========

   See accompanying supplementary notes to Parent Company condensed financial
                                   statements.


   
<PAGE>

                           MGIC INVESTMENT CORPORATION

           SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                        CONDENSED STATEMENT OF CASH FLOWS
                               PARENT COMPANY ONLY
                  Years Ended December 31, 1996, 1995 and 1994
                                                        
                                            1996       1995      1994
                                            (In thousands of dollars)
   Cash flows from operating 
     activities:                                             
       Net income                          $257,991  $207,565  $159,518
       Adjustments to reconcile net 
         income to net cash provided 
         by operating activities:                            
           Equity in undistributed net 
             income of subsidiaries        (240,631) (186,184) (153,756)
           Increase in income taxes 
             receivable                      (6,443)   (1,969)   (1,267)
           Decrease in accrued investment 
             income                              18        31        40
           Increase in accounts payable - 
             affiliates                       1,413     1,704     3,484
           Decrease in other liabilities        -        (226)     (733)
           Other                                 (1)     (233)      197
                                           --------  --------  --------
   Net cash provided by operating 
     activities                              12,347    20,688     7,483
                                           --------  --------  --------
   Cash flows from investing activities:                     
      Increase in investment in 
        subsidiaries                        (10,000)  (15,000)        -
      Purchase of fixed maturities           (7,232)  (11,034)     (355)
      Sale of fixed maturities                4,632    9,205      1,970
      Sale of equity securities                  30         -         -
                                           --------  --------  --------
   Net cash (used in) provided by 
     investing activities                   (12,570)  (16,829)    1,615
                                           --------  --------  --------
   Cash flows from financing activities:                     
      Dividends paid to shareholders         (9,425)   (9,371)   (9,335)
      Reissuance of treasury stock           10,209     6,079     2,151
                                           --------  --------  --------
   Net cash provided by (used in) 
     financing activities                       784    (3,292)   (7,184)
                                           --------  --------  --------
   Net increase in cash and short-term 
     investments                                561       567     1,914
   Cash and short-term investments at 
     beginning of year                        4,129     3,562     1,648
                                           --------  --------  --------
   Cash and short-term investments 
     at end of year                          $4,690    $4,129    $3,562
                                           ========  ========  ========
                                                             
     See accompanying supplementary notes to Parent Company condensed 
                          financial statements.

   
<PAGE>


   MGIC INVESTMENT CORPORATION

   SCHEDULE II - CONDENSED FINANCIAL INFORMATION OF REGISTRANT

                               PARENT COMPANY ONLY

                               SUPPLEMENTARY NOTES


   Note A

      The accompanying Parent Company financial statements should be read in
   conjunction with the Consolidated Financial Statements and Notes to
   Consolidated Financial Statements appearing on pages 14 through 27 of the
   MGIC Investment Corporation 1996 Annual Report to Shareholders.

   Note B

      The Company's insurance subsidiaries are subject to statutory
   regulations as to maintenance of policyholders' surplus and payment of
   dividends.  The maximum amount of dividends that the insurance
   subsidiaries may pay in any twelve-month period without regulatory
   approval by the Office of the Commissioner of Insurance of the State of
   Wisconsin is the lesser of adjusted statutory net income or 10% of
   statutory policyholders' surplus as of the preceding calendar year end. 
   Adjusted statutory net income is defined for this purpose to be the
   greater of statutory net income, net of realized investment gains, for the
   calendar year preceding the date of the dividend or statutory net income,
   net of realized investment gains, for the three calendar years preceding
   the date of the dividend less dividends paid within the first two of the
   preceding three calendar years.  In 1997, the Company's principal
   insurance subsidiary, Mortgage Guaranty Insurance Corporation can pay
   $25.2 million of dividends and the other insurance subsidiaries of the
   Company can pay $3.0 million of dividends without such regulatory
   approval.

      Certain of the Company's non-insurance subsidiaries also have
   requirements as to maintenance of net worth.  These restrictions could
   also affect the Company's ability to pay dividends.  In 1997, the Company
   can pay dividends of $35.5 million from the Parent Company's funds and
   funds available from the non-insurance subsidiaries.  In 1996, 1995 and
   1994, the Company paid dividends of $9.4 million, $9.4 million and $9.3
   million, respectively or $.16 per share.

   
<PAGE>


                           MGIC INVESTMENT CORPORATION

                            SCHEDULE IV - REINSURANCE

                       MORTGAGE INSURANCE PREMIUMS EARNED
                  Years Ended December 31, 1996, 1995 and 1994

                                            Assumed            Percentage
                                 Ceded to    From              of Amount
                      Gross       Other      Other       Net   Assumed to
                      Amount    Companies  Companies   Amount     Net
                                  (In thousands of dollars)
  
   Year ended 
   December 31,                      

   1996             $623,148     $19,350   $13,245    $617,043    2.1%
                    =========   =========  =========  =========
                                     
   1995             $522,069     $23,760    $8,191    $506,500    1.6%
                    =========   =========  =========  =========

   1994             $425,277     $31,492   $10,205    $403,990    2.5%
                    =========   =========  =========  =========


<PAGE>


                                INDEX TO EXHIBITS

                                  [Item 14(a)3]

    Exhibit
    Numbers       Description of Exhibits

    3.1           Articles of Incorporation, as amended, including
                  Articles of Amendment effective May 23, 1994.(1)


    3.2           Amended and Restated Bylaws.(2)

    4.1           Article 6 of the Articles of Incorporation
                  (included within Exhibit 3.1)

    4.2           Amended and Restated Bylaws (included as
                  Exhibit 3.2)

    10.1          Common Stock Purchase Agreement between the Company
                  and The Northwestern Mutual Life Insurance Company
                  ("NML"), dated November 30, 1984(3)

    10.2          Reinsurance Management Agreement between WMAC and
                  MGIC, dated February 28, 1985(4)

    10.3          Reinsurance Management Agreement between Mortgage
                  Guaranty Reinsurance Corporation ("MGRC") and MGIC,
                  effective September 30, 1985(5)

    10.4          Tax Agreement between NML, the Company and certain
                  subsidiaries of the Company, dated January 1, 1986,
                  including amendment thereto dated as of August 2,
                  1991(6)

    10.5          Tax Sharing Agreement between the Company, MGIC and
                  certain subsidiaries of MGIC, dated January 22,
                  1986(7)

    10.6          Amendment to Tax Agreement, dated as of August 14,
                  1991, by and between NML, the Company, and its
                  subsidiaries(8)

    10.7          Investment Advisory and Servicing Agreement between
                  the Company and NML Equity Services, Inc. (now known
                  as Northwestern Mutual Investment Services,Inc.),
                  dated December 29, 1989, as amended by Amendment
                  dated as of January 19, 1993(9)

    10.8          Amendment to Investment Advisory and Servicing
                  Agreement described in Exhibit 10.9, dated as of
                  February 1, 1995.(10)

    10.9          Amendment to Investment Advisory and Servicing
                  Agreement described in Exhibit 10.9, dated as of
                  January 26, 1996.(11)

    10.10         MGIC Investment Corporation Amended and Restated
                  1989 Stock Option Plan (including forms of option
                  agreement).(12)

    10.11         MGIC Investment Corporation 1991 Stock Incentive
                  Plan (formerly known as the 1991 Stock Option
                  Plan).(13)

    10.12         Form of Stock Option Agreement under 1991 Stock
                  Option Plan (now known as the 1991 Stock Incentive
                  Plan).(14)

    10.13         Two forms of Stock Option Agreements under 1991
                  Stock Incentive Plan (1994 Form 1 and 1994 Form
                  2).(15)

    10.14         Form of Restricted Stock Award Agreement under 1991
                  Stock Incentive Plan.(16)

    10.15         Executive Bonus Plan

    10.16         Supplemental Executive Retirement Plan.

    10.17         MGIC Investment Corporation Deferred Compensation
                  Plan for Non-Employee Directors.(17)

    10.18         MGIC Investment Corporation 1993 Restricted Stock
                  Plan for Non-Employee Directors.(18)

    10.19         Two forms of Award Agreement under MGIC Investment
                  Corporation 1993 Restricted Stock Plan for Non-
                  Employee Directors.(19)

    10.20         Form of MGIC Mortgage Guaranty Master Policy, in
                  effect generally for insurance commitments issued
                  beginning March 1, 1995, including the Master Policy
                  Program Endorsement relating to delegated
                  underwriting.(20)

    11            Statement re:  computation of per share earnings

    13            Information from the 1996 Annual Report of the
                  Company to Shareholders which is incorporated by
                  reference in this Annual Report on Form 10-K.

    21            List of Subsidiaries

    23            Consent of Price Waterhouse LLP

    27            Financial Data Schedule

        Supplementary List of the above Exhibits which relate to management
    contracts or compensatory plans or arrangements.

    10.10         MGIC Investment Corporation Amended and Restated
                  1989 Stock Option Plan (including forms of option
                  agreement).(12)

    10.11         MGIC Investment Corporation 1991 Stock Incentive
                  Plan (formerly known as the 1991 Stock Option
                  Plan).(13)

    10.12         Form of Stock Option Agreement under 1991 Stock
                  Option Plan (now known as the 1991 Stock Incentive
                  Plan).(14)

    10.13         Two forms of Stock Option Agreements under 1991
                  Stock Incentive Plan (1994 Form 1 and 1994 Form
                  2).(15)

    10.14         Form of Restricted Stock Award Agreement under 1991
                  Stock Incentive Plan.(16)

    10.15         Executive Bonus Plan

    10.16         Supplemental Executive Retirement Plan.

    10.17         MGIC Investment Corporation Deferred Compensation
                  Plan for Non-Employee Directors.(17)


    10.18         MGIC Investment Corporation 1993 Restricted Stock
                  Plan for Non-Employee Directors.(18)

    10.19         Two forms of Award Agreement under MGIC Investment
                  Corporation 1993 Restricted Stock Plan for Non-
                  Employee Directors.(19)

             The following documents, identified in the footnote references
   above, are incorporated by reference, as indicated, to the Company's
   Form S-1 Registration Statement (No. 33-41289), which became effective in
   August 1991 (the "1991 S-1"), or to the Company's Form S-1 Registration
   Statement (No. 33,47272) which became effective in June 1992 (the "1992 S-
   1"); or to the Company's Annual Reports on Form 10-K for the years ended
   December 31, 1991, 1992, 1993, 1994 or 1995 (the "1991 10-K," "1992 10-K,"
   "1993 10-K," "1994 10-K," and "1995 10-K," respectively; or to the
   Quarterly Report on Form 10-Q for the Quarter ended June 30, 1994 (the
   "10-Q as of June 30, 1994").  The documents are further identified by
   cross-reference to the Exhibits in the respective documents where they
   were originally filed:

   (1)    Exhibit 3.3 to the 10-Q as of June 30, 1994.


   (2)    Exhibit 3.2 to the 1991 S-1 and the amendment thereto is
          Exhibit 3.3 to the 1992 10-K.

   (3)    Exhibit 10.1 to the 1991 S-1.

   (4)    Exhibit 10.6 to the 1991 S-1.

   (5)    Exhibit 10.7 to the 1991 S-1.

   (6)    The Tax Agreement is Exhibit 10.8 to the 1991 S-1 and the
          amendment thereto is Exhibit 10.21 to the 1991 S-1.

   (7)    Exhibit 10.9 to the 1991 S-1.

   (8)    Exhibit 10.10 to the 1991 10-K.

   (9)    Exhibit 10.12 to the 1991 S-1 and the amendment thereto is
          Exhibit 10.15 to the 1992 10-K.

   (10)   Exhibit 10.11 to the 1994 10-K.

   (11)   Exhibit 10.11 to the 1995 10-K

   (12)   Exhibit 10.16 to the 1991 S-1.

   (13)   Exhibit 10.29 to the 10-Q as of June 30, 1994.  (The 1991 Stock
          Option Plan was contained in Exhibit 10.17 to the 1991 S-1.)

   (14)   Exhibit 10.19 to the 1991 10-K.

   (15)   Exhibits 10.30 and 10.31 to the 10-Q as of June 30, 1994.

   (16)   Exhibit 10.32 to the 10-Q as of June 30, 1994.

   (17)   Exhibit 10.23 to the 1993 10-K.

   (18)   Exhibit 10.24 to the 1993 10-K.

   (19)   Exhibits 10.27 and 10.28 to the 10-Q as of June 30, 1994.

   (20)   Exhibit 10.26 to the 1994 10-K.





                                                              Exhibit 10.15


                             EXECUTIVE BONUS PLAN OF
                          MGIC INVESTMENT CORPORATION 
                                 (the "Company")


   The Executive Bonus Plan of the Company in effect for 1997 (which is not
   contained in a formal plan document), applies to certain officers of the
   Company, including the executive officers of the Company identified in the
   Form 10-K for the year ended December 31, 1996.  Under the Executive Bonus
   Plan, if the Company achieves a minimum level of net income for 1997, an
   executive officer will be eligible for a bonus, depending upon the
   executive officer's performance with regard to the achievement of
   individual goals, within various ranges of up to 80% or 100% of such
   executive officer's base salary, depending on the range applicable to the
   executive officer.






                                                              Exhibit 10.16

   MGIC INVESTMENT CORPORATION
   SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

   1.   Purpose

             The purposes of this MGIC Investment Corporation Supplemental
   Executive Retirement Plan (hereinafter referred to as the "Plan") are to
   restore retirement benefits to certain participants in the Company's
   pension plan whose benefits under said Plan are or will be limited by
   reason of Sections 401(a)(17) or 415 of the Internal Revenue Code of 1986,
   as amended ("Code") and to provide certain other retirement benefits.

             This Plan is completely separate from the tax-qualified Pension
   Plan maintained by the Company and is not funded or qualified for special
   tax treatment under the Code.

   2.   Effective Date

             The Plan is effective as of July 31, 1990.

   3.   Definitions

             The following terms as used herein shall have the meanings set
   forth below:

                  "Company" means MGIC Investment Corporation, a Wisconsin
   corporation.

                  "Employer" or "Employers" means the Company and any
   subsidiary or affiliate thereof which is a "Participating Employer" under
   the Pension Plan.

                  "Group Annuity Contract" means Group Annuity Contract
   8474-0 issued by Metropolitan Life Insurance Company to provide for the
   payment of benefits accrued under a terminated pension
 plan previously
   maintained by the Company's predecessor.

                  "Participant" means an employee of the Employers who is a
   participant in the Pension Plan and who is (or whose position is)
   designated for participation herein by the board of directors of the
   Company. As of the Effective Date, the following officers of Mortgage
   Guaranty Insurance Corporation are designated as Participants:

                       Chief Executive Officer
                       Chief Operating Officer
                       All Executive Vice Presidents
                       All Senior Vice Presidents

             "Pension Plan" means the defined benefit pension plan maintained
   by the Company known as the MGIC Investment Corporation Pension Plan and
   any successor to such plan maintained by the Company or any successor or
   affiliate of the Company.

             "Pension Plan Benefits" means the monthly benefits payable under
   the terms of the Pension Plan and/or under the Group Annuity Contract.

   4.   Administration

             The Plan shall be administered by the Administrator of the
   Pension Plan ("Administrator").  Decisions and determinations by the
   Administrator shall be final and binding on all parties, except when
   manifestly contrary to the provisions of this Plan and except that no
   presumption of validity shall be given to any such decision or
   determination with respect to Section 5(d).  The Administrator shall have
   the authority to interpret the Plan, to promulgate and revise rules and
   regulations relating to the Plan and to make any other determinations
   which it deems necessary or advisable for the administration thereof.

   5.   Pension Plan Supplement

             (a)  Any Participant who, upon termination of employment with
   the Employers after the Effective Date has a vested and nonforfeitable
   right to a pension under the Pension Plan, or such Participant's spouse or
   other beneficiary, shall be entitled to a benefit payable hereunder in
   accordance with this Section 5, equal to the excess, if any, of

             (i)  the amount of such Participant's, surviving spouse's or
        other beneficiary's Pension Plan Benefits computed under the
        provisions of the Pension Plan and Group Annuity Contract, but
        without regard to the limitations on benefits imposed by reason of
        Section 415 of the Code or the limit on considered compensation under
        Section 401(a)(17) of the Code; over

             (ii)  the amount of Pension Plan Benefits actually payable to
        such Participant, surviving spouse or other beneficiary for each
        month under the Pension Plan and Group Annuity Contract, as computed
        under the provisions of such Plan and Contract.

             The amount of Pension Plan Benefits in the computation under
   clauses (i) and (ii) above shall exclude any Pension Plan Benefits earned
   after a Participant no longer occupies any position designated for
   participation in the Plan.

             (b)  Benefits under this Section 5 shall become payable when the
   Participant or the Participant's spouse or other beneficiary begins to
   receive Pension Plan benefits and shall be payable in the same manner, at
   the same time and in the same form as the benefits actually paid to the
   Participant, spouse or other beneficiary under the Pension Plan.

             (c)  Notwithstanding the foregoing, no benefits shall be payable
   under this Plan to or on behalf of any Participant whose employment with
   the Employers is terminated "for cause" or who engages in "prohibited
   competition." For purposes of this Plan, the term "for cause" shall mean
   fraud, dishonesty, theft, gross negligence, willful misconduct in the
   performance of duties or other similar causes. The term "prohibited
   competition" shall mean the rendering of services to any competitor of the
   Employers (i) during the term of his employment by the Employers and (ii)
   for a period of one year after any termination of the Participant's
   employment in the geographic area or areas (localized or national, as the
   case may be) in which he was employed, assigned or otherwise worked on
   behalf of the Company, or a present or future parent, subsidiary or
   affiliate of the Company, during the three years prior to the termination
   of his employment. For purposes of this Plan, the term "competitor" means
   any corporation, partnership, proprietorship or firm (i) engaged in the
   business of mortgage guaranty in any geographic area in which the Company
   or a present or future parent, subsidiary or affiliate of the Company is
   so engaged or (ii) engaged in any other business in which the Company or
   any subsidiary is engaged, in any geographic area in which the Company or
   any subsidiary is so engaged, but only if such business accounted for at
   least 10% of the revenues of the Company and its subsidiaries, on a
   consolidated basis, during the twelve months preceding the month in which
   the Participant's employment terminated.

             (d)  In the case of a Participant who first becomes a
   Participant in 1996, the foregoing provisions of Section 5 shall be
   modified to the extent provided below:

                 (i)   For purposes of Section 5(a), such Participant
        shall be deemed to have a vested and nonforfeitable right to a
        pension under the Pension Plan.

                 (ii)  For purposes of clause (i) of Section 5(a), such
        Participant (A) shall be deemed to have a Past Service Benefit
        under Section 5.01(a) of the Pension Plan equal to $2,833.33 per
        month, and (B) shall be deemed to have a number of years of
        Vesting Service under the Pension Plan sufficient to be eligible
        for each benefit under the Pension Plan and a vested percentage
        under the Pension Plan sufficient to avoid any reduction in the
        amount of any such benefit.

                 (iii) Section 5(b) shall not apply and benefits under
        this Section 5 shall become payable when such Participant or
        such Participant's spouse or other beneficiary would have
        received Pension Plan benefits assuming that such Participant's
        deemed Vesting Service under clause (ii) of this Section 5(d)
        was such Participant's actual Vesting Service under the Pension
        Plan and giving effect to any election to commence receiving
        benefits filed with the Administrator as contemplated below,
        except that if such an election is made under this Plan and such
        Participant is also eligible to elect to commence receiving
        benefits under the Pension Plan, such Participant shall also
        make such an election under the Pension Plan.  Benefits under
        this Plan shall be payable in the same manner and in the same
        form as benefits would have been payable to the Participant,
        spouse or other beneficiary under the Pension Plan in accordance
        with the immediately preceding sentence if such benefits were
        actually payable thereunder.  Any election by such Participant
        to commence receiving benefits or of the form of benefits under
        this Plan shall be filed with the Administrator in accordance
        with the same procedures as established under the Pension Plan,
        and in the case of an election of the form of benefits, shall be
        the same as any such election under the Pension Plan and shall
        be subject to the same restrictions as under the Pension Plan.

                 (iv)  Section 5(c) shall apply only to benefits under
        this Plan which are attributable to the Annual Pension Credits
        of such Participant.  No benefits under this Plan which are
        attributable to the Past Service Benefit referred to in clause
        (ii) of this Section 5(d) shall be payable to or on behalf of
        such Participant if (A) prior to the third anniversary of such
        Participant's first day as an employee of an Employer, such
        Participant quits (as such term is used in Section 2.01 (a)(i)
        of the Pension Plan) as an employee of the Employers other than
        as a result of a meaningful reduction in such Participant's job
        status, responsibilities or compensation, or (B) such
        Participant engages in "prohibited competition," as such term is
        used in Section 5(c).

                 (v)   Capitalized definitional terms used in this
        Section 5(d) which are defined in the Pension Plan are used as
        so defined."

   6.   Plan Reserve

             (a)  The Company shall establish a bookkeeping reserve with
   respect to the benefits provided under this Plan. Such reserve shall serve
   solely as a device for determining the amount of the Company's accrued
   deferred liability for the benefits provided herein, and shall not
   constitute or be treated as a trust fund of any kind, it being expressly
   provided that the amounts credited to the reserve shall be and remain the
   sole property of the Company, and that no Participant shall have any
   proprietary rights of any nature whatsoever with respect thereto or with
   respect to any investments the Company may make to aid it in meeting its
   obligations hereunder.

             (b)  No funds or other assets of the Company shall be segregated
   and attributable to the amounts that may from time to time be credited to
   the reserve. Benefit payments under the Plan shall be made from the
   general assets of the Company at the time any such payments becomes due
   and payable. To the extent that any person acquires a right to receive
   payments from the Company hereunder, such right shall be no greater than
   the right of an unsecured creditor.

   7.   Inter-Employer Reimbursements

             Although all benefit payments hereunder shall be made by the
   Company, the Administrator shall determine whether any portion thereof is
   allocable to any other Employer on account of its employment of one or
   more Participants. In any such case, the Company shall be reimbursed by
   such other Employer in the amount and manner determined by the
   Administrator.

   8.   Non-Alienation of Payments

             Benefits payable under the Plan shall not be subject in any
   manner to alienation, sale, transfer, assignment, pledge, attachment,
   garnishment or encumbrance of any kind, by will, or by inter vivos
   instrument. Any attempt to alienate, sell, transfer, assign, pledge or
   otherwise encumber any such benefit payment, whether currently or
   thereafter payable, shall be void and shall not be recognized by the
   Administrator or the Company.

   9.   Limitation of Rights Against the Employers

             Participation in this Plan, or any modifications thereof, or the
   payments of any benefits hereunder, shall not be construed as giving to
   any person any right to be retained in the service of the Employers,
   limiting in any way the right of the Employers to terminate such person's
   employment at any time, or evidencing any agreement or understanding that
   the Employers will employ such person in any particular position or at any
   particular rate of compensation.

   10.  Applicable Laws

             The Plan shall be construed, administered and governed in all
   respects under and by the laws of the State of Wisconsin.

   11.  Liability

             Neither the Company nor any shareholder, director, officer or
   other employee of any Employer or any other person shall be liable for any
   act or failure to act hereunder except for gross negligence or fraud.

   12.  Amendment or Termination

             (a)  The Company, by action of its board of directors, reserves
   the right to amend or terminate this Plan at any time, provided that no
   such amendment or modification shall adversely affect the rights of any
   Participant, spouse or other beneficiary with respect to any benefits
   under this Plan which have accrued to the effective date of such
   amendment, termination or modification.

       (b) It is understood that an individual's entitlement to benefits
   under Section 5 of this Plan may be automatically reduced as the result of
   an increase in his Pension Plan Benefits. Nothing herein shall be
   construed in any way to limit the right of the Company to amend or modify
   the Pension Plan.



                                                        EXHIBIT 11


                  MGIC INVESTMENT CORPORATION AND SUBSIDIARIES
                 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
              For The Years Ended December 31, 1996, 1995 and 1994

                                          1996        1995       1994
                                            
                                      (In thousands, except per share data)
   PRIMARY EARNINGS PER SHARE

   Adjusted shares outstanding:
      Average common shares 
        outstanding                      58,894     58,542     58,355 
      Net shares to be issued upon 
        exercise of dilutive stock 
        options after applying
        treasury stock method               629        742        622 
                                        --------  --------- ----------
      Adjusted shares outstanding        59,523     59,284     58,977 
                                        ========  ========= ==========
   Net income                          $257,991   $207,565   $159,518 
                                       =========  =========  =========
   Net income per share                   $4.33      $3.50      $2.70
                                       =========  =========  =========
   FULLY DILUTED EARNINGS PER SHARE

   Adjusted shares outstanding:
      Average common shares 
        outstanding                      58,894     58,542      58,355
      Net shares to be issued upon 
        exercise of dilutive stock 
        options after applying 
        treasury stock method               676        792         661
                                       ---------  ---------  ---------
      Adjusted shares outstanding        59,570     59,334      59,016
                                       =========  =========  =========
   Net income                          $257,991   $207,565    $159,518
                                       =========  =========  =========
   Net income per share                   $4.33      $3.50      $2.70
                                       =========  =========  =========
                                                           





                                                                 Exhibit 13

   MGIC  Investment Corporation and Subsidiaries - Years Ended December 31,
   1996, 1995, 1994, 1993 and 1992

   
<TABLE>
   Five-Year Summary of Financial Information
   <CAPTION>

                                         1996            1995            1994            1993           1992
                                          (In thousands of dollars, except per share data)

   <S>                              <C>             <C>              <C>            <C>             <C>      
   Summary of Operations
   Premiums:
     Net premiums written.........  $   588,927     $   480,312      $   410,296    $   342,727     $   266,699
                                    ===========     ===========      ===========    ===========     ===========

     Net premiums earned..........  $   617,043     $   506,500      $   403,990    $   299,342     $   226,065
     Investment income............      105,355          87,543           75,233         64,689          58,261
     Realized investment 
       gains, net.................        1,220           1,496              336          5,139           5,995
     Other revenue................       22,013          22,347           22,667         34,347          31,390
                                    -----------     -----------      -----------    -----------     -----------
       Total revenues.............      745,631         617,886          502,226        403,517         321,711
                                    -----------     -----------      -----------    -----------     -----------

   Losses and expenses:
     Losses incurred, net.........      234,350         189,982          153,081        107,132          86,836
     Underwriting and other 
       expenses...................      146,483         137,559          136,027        132,057         119,293
     Interest expense.............        3,793           3,821            3,856          3,888           3,927
     Ceding commission............       (4,023)         (4,885)          (7,821)       (14,375)        (29,993)
                                    -----------     -----------      -----------    -----------     -----------
       Total losses and 
         expenses.................      380,603         326,477          285,143        228,702         180,063
                                    -----------     -----------      -----------    -----------     -----------

   Income before income tax.......      365,028         291,409          217,083        174,815         141,648
   Provision for income tax.......      107,037          83,844           57,565         47,546          39,386
                                    -----------     -----------      -----------    -----------     -----------
   Net income.....................  $   257,991     $   207,565      $   159,518    $   127,269     $   102,262
                                    ===========     ===========      ===========    ===========     ===========

   Weighted average common 
     shares outstanding
     (in thousands)...............       59,523          59,284           58,977         58,926          58,725
                                    ===========     ===========      ===========    ===========     ===========

   Net income per share...........  $      4.33     $      3.50      $      2.70    $      2.16     $      1.74
                                    ===========     ===========      ===========    ===========     ===========

   Dividends per share............
  $      0.16     $      0.16      $      0.16    $     0.145     $      0.14
                                    ===========     ===========      ===========    ===========     ===========

   Balance sheet data
     Total investments............  $ 2,036,234      $1,687,221       $1,292,960     $1,099,643     $   896,120
     Total assets.................    2,222,315       1,874,719        1,476,266      1,343,205       1,133,537
     Loss reserves................      514,042         371,032          274,469        213,600         167,094
     Shareholders' equity.........    1,366,115       1,121,392          838,074        712,070         592,199
     Book value per share.........        23.17           19.13            14.35          12.22           10.17


   New primary insurance written 
     ($ millions)                  $     32,756    $     30,277     $     34,419   $     37,041    $     27,421

   Insurance in force (at year-end) 
     ($ millions)
     Direct primary insurance
       New book*..................  $   131,397     $   120,341      $   104,416   $     85,848    $     71,246
       Old book*..................        6,505           8,196            9,932         12,737          16,676
     Direct primary risk
       New book...................       29,308          25,502           20,756         16,810          14,097
       Old book...................        1,637           2,055            2,481          3,180           4,193
     Net primary risk
       New book...................       28,565          24,593           19,664         13,971          10,638
       Old book...................        1,006             390              471            604             791
     Direct pool insurance
       New book...................        1,001           1,074            1,235          1,710           2,431
       Old book...................        1,446           1,731            2,041          2,983           4,394
     Direct pool risk
       New book...................          232             254              295            348             355
       Old book...................          533             638              721            962           1,226
     Net pool risk
       New book...................          181             186              195            188             209
       Old book...................          349             134              157            211             261

   Primary loans in default ratios
     Policies in force
       New book...................    1,299,038       1,219,304        1,080,882        921,259         806,958
       Old book...................      223,986         270,800          315,313        386,103         482,007
     Loans in default
       New book...................       25,034          19,980           15,439         13,658          13,082
       Old book...................       10,072          12,354           14,516         16,757          20,247
     Percentage of loans in default
       New book...................        1.93%           1.64%            1.43%          1.48%           1.62%
       Old book...................        4.50%           4.56%            4.60%          4.34%           4.20%

   Insurance operating ratios (GAAP)
     Loss ratio...................        38.0%           37.5%            37.9%          35.8%           38.4%
     Expense ratio................        21.6%           24.6%            28.1%          25.7%           24.6%
                                    -----------     -----------      -----------    -----------     -----------
     Combined ratio...............        59.6%           62.1%            66.0%          61.5%           63.0%
                                    ===========     ===========      ===========    ===========     ===========

   Risk-to-capital ratios (statutory)
     Combined insurance 
       subsidiaries...............       18.8:1          19.9:1           20.6:1         18.9:1          18.7:1
     MGIC.........................       18.1:1          19.1:1           19.6:1         17.1:1          16.1:1


   *The New book consists of insurance written by Mortgage Guaranty Insurance Corporation ("MGIC"), a subsidiary of MGIC
   Investment Corporation, since March 1, 1985. The Old book consists of insurance written or committed to by Wisconsin Mortgage
   Assurance Corporation ("WMAC") prior to March 1, 1985. MGIC and another subsidiary of MGIC Investment Corporation are
   reinsurers of 64.8% of the Old book for 1996 and 20% of the Old book in prior years, and MGIC is the manager of the Old book
   for WMAC. The Direct information shown above for the Old book represents 100% of the Old book.


   </TABLE>


   
<PAGE>

   1996


   Management's Discussion and Analysis

   Results of Consolidated Operations

   1996 Compared with 1995

   Net income for 1996 was $258.0 million, compared with $207.6 million in
   1995, an increase of 24%. Net income per share for 1996 was $4.33,
   compared with $3.50 in 1995, an increase of 24%.

   The amount of new primary insurance written by Mortgage Guaranty Insurance
   Corporation ("MGIC") during 1996 was $32.8 billion ($7.6 billion, $8.9
   billion, $8.6 billion and $7.7 billion during the first through fourth
   quarters, respectively), compared with $30.3 billion in 1995 ($6.1
   billion, $7.0 billion, $9.0 billion and $8.2 billion during the first
   through fourth quarters, respectively). Refinancing activity accounted for
   19% of new primary insurance written in 1996 (29%, 19%, 10% and 18% of new
   primary insurance written for the first through fourth quarters,
   respectively), compared to 11% in 1995 (7%, 6%, 13% and 17% of new primary
   insurance written for the first through fourth quarters, respectively).

   The $32.8 billion of new primary insurance written during 1996 was offset
   by the cancellation of $21.7 billion of insurance in force ($5.7 billion,
   $6.1 billion, $5.0 billion and $4.9 billion during the first through
   fourth quarters, respectively), and resulted in a net increase of $11.1
   billion in primary insurance in force, compared to new primary insurance
   written of $30.3 billion, cancellation of $14.4 billion, and a net
   increase of $15.9 billion in insurance in force during 1995. Direct
   primary insurance in force was $131.4 billion at December 31, 1996,
   compared to $120.3 billion at December 31, 1995.

   Cancellation activity increased during 1996 due to increased refinancing
   activity which resulted in a decrease in the MGIC persistency rate
   (percentage of insurance remaining in force from one year prior) to 82.0%
   at December 31, 1996, from 86.3% at December 31, 1995. Cancellation
   activity could increase in 1997 if proposed legislation regarding
   cancellation of mortgage insurance is enacted.

   New insurance written for 1996 reflected an increase in the usage of the
   monthly premium product to 90% of new insurance written from 83% of new
   insurance written in 1995. New insurance written for adjustable-rate
   mortgages decreased to 26% of new insurance written in 1996 from 33% of
   new insurance written in 1995.

   Principally as a result of changes in coverage requirements by the Federal
   Home Loan Mortgage Corporation and the Federal National Mortgage
   Association which were effective in the first quarter of 1995, new
   insurance written for mortgages with loan-to-value ("LTV") ratios in
   excess of 85% but not more than 90% ("90%") and coverage of 25% was 39% of
   new insurance written in 1996 compared to 33% in 1995. New insurance
   written for mortgages with LTV ratios in excess of 90% but not more than
   95% ("95%") and coverage of 30% was 38% of new insurance written in 1996
   compared to 34% in 1995.

   Net premiums written were $588.9 million in 1996, compared with $480.3
   million in 1995, an increase of $108.6 million, or 23%. The increase was
   primarily a result of the growth in insurance in force.

   Net premiums earned were $617.0 million for 1996, compared to $506.5
   million for 1995, an increase of $110.5 million, or 22%, primarily
   reflecting the growth of insurance in force.

   Investment income for 1996 was $105.4 million, an increase of 20% over the
   $87.5 million in 1995. This increase was primarily the result of an
   increase in the amortized cost of average investment assets to $1,788.3
   million for 1996, from $1,466.7 million for 1995, an increase of 22%. The
   increase was partially offset by a decrease in the portfolio's average
   pre-tax investment yield to 5.9% in 1996 from 6.0% in 1995. The
   portfolio's average after-tax investment yield was 5.1% for 1996 compared
   to 5.2% for 1995.

   Other revenue was $22.0 million in 1996, compared with $22.3 million in
   1995. Other revenue represents activity of the Company's mortgage services
   operations, primarily contracts with government agencies for premium
   reconciliation and claim administration and fee-based services for
   underwriting.

   Ceding commission for 1996 was $4.0 million, compared to $4.9 million in
   1995, a decrease of 18%. The decrease was primarily attributable to
   reductions in premiums ceded under quota share reinsurance agreements.

   Net losses incurred increased to $234.4 million in 1996, from $190.0
   million in 1995, an increase of 23%. Such increase was primarily due to an
   increase in the notice inventory from 19,980 at December 31, 1995 to
   25,034 at December 31, 1996 resulting from an increasing percentage of the
   Company's insurance in force reaching its peak claim paying years, concern
   with early loss developments on insurance written in late 1994 and the
   first half of 1995, the continued high level of loss activity in certain
   high cost geographic regions and an increase in claim amounts on defaults
   with deeper coverages. The increase was partially offset by a redundancy
   in prior-year loss reserves resulting from actual claim rates and actual
   claim amounts being lower than those estimated by the Company when
   originally establishing the reserve at December 31, 1995. The Company
   expects that, in general, incurred losses will continue to rise as a
   result of increased delinquency activity primarily related to the higher
   risk profile on loans insured in late 1994 and the first half of 1995, and
   the continued growth and maturing of its insurance in force as well as
   anticipated higher severity resulting from higher coverages for business
   written beginning in 1995. At December 31, 1996, 42% of the insurance in
   force was written during the last two years, compared to 48% at December
   31, 1995. The highest claim frequency years have typically been the third
   through fifth years after the year of loan origination. However, the
   pattern of claims frequency for refinance loans may be different from the
   historical pattern of other loans. A substantial portion of the insurance
   written in 1992 and 1993 represented insurance on the refinance of
   mortgage loans originated in earlier years.

   Underwriting and other expenses increased 6% in 1996 to $146.5 million
   from $137.6 million in 1995. This increase in expenses was primarily due
   to an increase in expenses associated with the fee-based services for
   underwriting and an increase in premium tax due to higher premium written.

   The consolidated insurance operations loss ratio was 38.0% for 1996
   compared to 37.5% for 1995. The consolidated insurance operations expense
   and combined ratios were 21.6% and 59.6%, respectively, for 1996 compared
   to 24.6% and 62.1%, respectively, for 1995.

   The effective tax rate was 29.3% in 1996, compared with 28.8% in 1995.
   During both years, the effective tax rate was below the statutory rate of
   35%, reflecting the benefits of tax-preferenced investment income. The
   higher effective tax rate in 1996 resulted from a lower percentage of
   total income before tax being generated from tax-preferenced investments
   in 1996.

   1995 Compared with 1994

   Net income for 1995 was $207.6 million, compared with $159.5 million in
   1994, an increase of 30%. Net income per share for 1995 was $3.50,
   compared with $2.70 in 1994, an increase of 30%.

   The amount of new primary insurance written by MGIC during 1995 was $30.3
   billion compared with $34.4 billion in 1994 ($8.7 billion, $9.1 billion,
   $8.9 billion and $7.7 billion during the first through fourth quarters,
   respectively). Refinancing activity accounted for 11% of new primary
   insurance written in 1995 compared to 17% in 1994 (37%, 17%, 7% and 7% of
   new primary insurance written for the first through fourth quarters,
   respectively).

   The $30.3 billion of new primary insurance written during 1995 was offset
   by the cancellation of $14.4 billion of insurance in force and resulted in
   a net increase of $15.9 billion in primary insurance in force, compared to
   new primary insurance written of $34.4 billion, cancellation of $15.8
   billion, and a net increase of $18.6 billion in insurance in force during
   1994. Direct primary insurance in force was $120.3 billion at December 31,
   1995, compared to $104.4 billion at December 31, 1994.

   Cancellation activity decreased during 1995 due to the drop in refinancing
   activity which resulted in an increase in the MGIC persistency rate
   (percentage of insurance remaining in force from one year prior) to 86.3%
   at December 31, 1995, from 81.5% at December 31, 1994.

   Net premiums written were $480.3 million in 1995, compared with $410.3
   million in 1994, an increase of $70.0 million, or 17%. The increase was
   primarily a result of the growth in insurance in force and premiums
   received on products for which the Company charges higher premium rates.
   Net premiums written in 1994 included the receipt of $23.1 million of
   unearned premium reserves in conjunction with the reassumption of business
   previously ceded under certain reinsurance treaties.

   Net new premiums written decreased 55% in 1995 to $52.8 million, from
   $116.7 million during 1994, offset by a 46% increase in net renewal
   premiums written to $427.5 million in 1995 from $293.6 million in 1994. 

   The decrease in net new premiums written during 1995 resulted primarily
   from the increase in the usage of the monthly premium product to 83% of
   new insurance written from 51% of new insurance written in 1994, and the
   continued decline in single premium business from 2% of new insurance
   written in 1994 to 1% of new insurance written in 1995.

   These decreases in net new premiums written were partially offset by an
   increase in new insurance written on products for which the Company
   charges higher premium rates, principally mortgages with LTV ratios of 95%
   and mortgages with coverages of 25% and 30%. New insurance written for
   mortgages with LTV ratios of 95% increased to 43% of new insurance written
   from 36% in 1994.

   Principally as a result of changes in coverage requirements by the Federal
   Home Loan Mortgage Corporation and the Federal National Mortgage
   Association, new insurance written for mortgages with LTV ratios of 90%
   and coverage of 25% was 33% of new insurance written in 1995 compared to
   4% in 1994. New insurance written for mortgages with LTV ratios of 95% and
   coverage of 30% was 34% of new insurance written in 1995 compared to 2% in
   1994.

   Net renewal premiums increased as a result of the growth of insurance in
   force and the increased usage of monthly premiums. Monthly premiums
   received after the initial payment are classified as renewal premiums.
   Renewal premiums were reduced by cancellation activity resulting in $15.1
   million of net premiums being refunded in 1995, compared to $20.5 million
   in 1994 when there was higher cancellation activity. The net renewal
   premiums for 1994 included the receipt of $23.1 million of unearned
   premium reserves in conjunction with the reassumption of business
   previously ceded under certain reinsurance treaties.

   Net premiums earned were $506.5 million for 1995, compared to $404.0
   million for 1994, an increase of $102.5 million, or 25%, primarily
   reflecting the growth of insurance in force, the increase in persistency
   and premiums earned on products for which the Company charges higher
   premium rates.

   Investment income for 1995 was $87.5 million, an increase of 16% over the
   $75.2 million in 1994. This increase was primarily the result of an
   increase in the amortized cost of average investment assets to $1,466.7
   million for 1995, from $1,215.0 million for 1994, an increase of 21%. The
   increase was partially offset by a decrease in the portfolio's average
   pre-tax investment yield to 6.0% in 1995 from 6.2% in 1994. The
   portfolio's average after-tax investment yield was 5.2% for 1995 compared
   to 5.6% for 1994.

   Other revenue was $22.3 million in 1995, compared with $22.7 million in
   1994. Other revenue represents activity of the Company's mortgage services
   operations, primarily contracts with government agencies for premium
   reconciliation and claim administration and fee-based services for
   underwriting.

   Ceding commission for 1995 was $4.9 million, compared to $7.8 million in
   1994, a decrease of 37%. The decrease was primarily attributable to
   reductions in premiums ceded under quota share reinsurance agreements.

   Net losses incurred increased to $190.0 million in 1995, from $153.1
   million in 1994, an increase of 24%. Such increase was primarily a result
   of higher reserve levels necessitated by increased notice of default
   activity on loans insured in late 1994 and the first half of 1995 which
   had a higher risk profile than the insurance in force as a whole, and the
   continued growth and maturation of the insurance in force. The increase
   was partially offset by a redundancy in prior-year loss reserves resulting
   from actual claim rates and actual claim amounts being lower than those
   estimated by the Company when originally establishing the reserve at
   December 31, 1994. At December 31, 1995, 48% of the insurance in force was
   written during the last two years, compared to 62% at December 31, 1994.
   The highest claim frequency years have typically been the third through
   fifth years after the year of loan origination. However, a substantial
   portion of the insurance written in 1992 and 1993 represented insurance on
   the refinance of mortgage loans originated in earlier years. Because of
   the earlier originations, the pattern of claims frequency for these
   refinance loans may be different from the historical pattern of other
   loans. 

   Underwriting and other expenses increased slightly in 1995 to $137.6
   million from $136.0 million in 1994. Contributing to the increase in
   expenses was a reduction in the amount of deferred insurance policy
   acquisition costs due to the growth of the monthly premium product.

   The consolidated insurance operations loss ratio was 37.5% for 1995
   compared to 37.9% for 1994. The consolidated insurance operations expense
   and combined ratios were 24.6% and 62.1%, respectively, for 1995 compared
   to 28.1% and 66.0%, respectively, for 1994. The expense ratio for 1994
   excludes the $23.1 million received as a result of the reassumption of
   certain reinsurance treaties.

   The effective tax rate was 28.8% in 1995, compared with 26.5% in 1994.
   During both years, the effective tax rate was below the statutory rate of
   35%, reflecting the benefits of tax-preferenced investment income. The
   higher effective tax rate in 1995 resulted from a lower percentage of
   total income before tax being generated from tax-preferenced investments
   in 1995.

   Financial Condition

   Consolidated total investments were $2,036.2 million at December 31, 1996,
   compared with $1,687.2 million at December 31, 1995, an increase of 21%.
   Offsetting the increase was a decrease of $21.6 million in unrealized
   gains on securities marked to market. The Company generated consolidated
   cash flows from operating activities of $367.8 million during 1996,
   compared to $286.5 million generated during 1995. The increase in
   operating cash flows during 1996 is due primarily to an increase in
   renewal premiums and the receipt of $40 million in connection with the
   WMAC Transaction described below. As of December 31, 1996, the Company had
   $140.1 million of short-term investments with maturities of 90 days or
   less, and 70% of the portfolio was invested in tax-preferenced securities.
   In addition, at December 31, 1996, based on book value, the Company's
   total investments, which were virtually all comprised of fixed-income
   securities, were approximately 99% invested in "A" rated and above,
   readily marketable securities, concentrated in maturities of less than 15
   years.

   In September 1996, the Company signed an agreement with Wisconsin Mortgage
   Assurance Corporation ("WMAC") and a WMAC reinsurer to assume all of the
   reinsurer's interest in WMAC mortgage insurance writings, which had
   previously been ceded to that reinsurer ("WMAC Transaction"). WMAC wrote
   mortgage insurance on first mortgages collateralized by one-to-four-family
   residences until February 28, 1985. Under the agreement, the Company
   assumed reinsurance on approximately $4.2 billion of WMAC's insurance in
   force (representing approximately $1.1 billion of risk in force) committed
   to, or written, through February 28, 1985. As a result, the amount of
   WMAC's insurance in force ceded to the Company increased to approximately
   $6.2 billion (representing $1.6 billion of risk in force), with the
   portion of WMAC's insurance in force reinsured by the Company increasing
   from approximately 21 percent to approximately 65 percent. The Company
   received approximately $40 million as payment for its assumption of
   existing loss and unearned premium reserves related to the insurance in
   force being assumed from WMAC.

   Consolidated loss reserves increased 39% to $514.0 million at December 31,
   1996 from $371.0 million at December 31, 1995, reflecting the higher level
   of defaults as described in the Results of Consolidated Operations (1996
   Compared with 1995) and the increase in loss reserves assumed from the
   WMAC Transaction. Consistent with industry practices, the Company does not
   establish loss reserves for future claims on insured loans which are not
   currently in default.

   Consolidated unearned premiums decreased $31.9 million from $251.2 million
   at December 31, 1995, to $219.3 million at December 31, 1996, reflecting
   the high level of monthly premium policies written in 1996, for which
   there is no unearned premium. Reinsurance recoverable on unearned premiums
   decreased $3.8 million to $11.7 million at December 31, 1996 from $15.5
   million at December 31, 1995, primarily reflecting the reduction in
   unearned premiums.

   Consolidated shareholders' equity increased to $1,366.1 million at
   December 31, 1996, from $1,121.4 million at December 31, 1995, an increase
   of 22%. This increase consisted of $258.0 million of net income during
   1996 and $10.2 million from the reissuance of treasury stock, offset by a
   decrease in net unrealized gains on investments, net of tax, of $14.1
   million and dividends declared of $9.4 million.

   Liquidity and Capital Resources

   The Company's consolidated sources of funds consist primarily of premiums
   written and investment income. Funds are applied primarily to the payment
   of claims and expenses. Approximately 70% of underwriting expenses are
   personnel-related costs, most of which are considered by the Company to be
   fixed costs over the short term. Approximately 8% of operating expenses
   relate to occupancy costs, which are fixed costs. Substantially all of the
   remaining operating expenses are considered by the Company to be variable
   in nature, with data processing costs and taxes, licenses and fees
   representing approximately 4% and 9%, respectively, of total operating
   expenses. The Company generated positive cash flows of approximately
   $367.8 million, $286.5 million and $239.5 million in 1996, 1995 and 1994,
   respectively, as shown on the Consolidated Statement of Cash Flows.
   Positive cash flows are invested pending future payments of claims and
   other expenses. Cash-flow shortfalls, if any, could be funded through
   sales of short-term investments and other investment portfolio securities.

   In January 1997, the Company is obligated to repay mortgages payable of
   $35.4 million, which is secured by the home office and substantially all
   of the furniture and fixtures of the Company. The Company expects that it
   will use internally generated funds to repay this debt. The Company does
   not anticipate any significant capital expenditures during 1997.

   MGIC is the principal insurance subsidiary of the Company. MGIC's risk-to-
   capital ratio was 18.1:1 at December 31, 1996 compared to 19.1:1 at
   December 31, 1995. The decrease was due to MGIC's increased policyholders'
   reserves, partially offset by the additional risk in force of $4.3 billion
   resulting from the $13.5 billion net addition to insurance in force during
   1996. Part of the increase in risk in force and insurance in force was due
   to the reinsurance assumed from the WMAC Transaction described above.
   
   The Company's combined insurance risk-to-capital ratio was 18.8:1 at
   December 31, 1996, compared to 19.9:1 at December 31, 1995. The decrease
   was due to the same reasons as described above.

   
<PAGE>

   MGIC  Investment Corporation and Subsidiaries - Years Ended December 31,
   1996, 1995 and 1994

   Consolidated Statement of Operations

                                           1996           1995         1994  
                          (In thousands of dollars, except per share data)
   REVENUES

   Premiums written:
     Direct......................... $  587,626    $   492,238   $   400,043
     Assumed........................     16,912          8,043         9,737
     Ceded (note 7).................    (15,611)       (19,969)          516
                                      ---------      ---------     ---------
   Net premiums written.............    588,927        480,312       410,296
   Decrease (increase) in 
     unearned premiums..............     28,116         26,188        (6,306)
                                      ---------      ---------     ---------
   Net premiums earned
     (note 7).......................    617,043        506,500       403,990

   Investment income, net of 
     expenses (note 4)..............    105,355         87,543        75,233
   Realized investment gains, 
     net (note 4)...................      1,220          1,496           336
   Other revenue....................     22,013         22,347        22,667
                                       --------       --------      --------

         Total revenues.............    745,631        617,886       502,226
                                       --------       --------      --------

   LOSSES AND EXPENSES
     Losses incurred, net
       (note 7).....................    234,350        189,982       153,081
     Underwriting and other
       expenses.....................    146,483        137,559       136,027
     Interest expense...............      3,793          3,821         3,856
     Ceding commission (note 7).....     (4,023)        (4,885)       (7,821)
                                      ---------      ---------     ---------
         Total losses and
             expenses...............    380,603        326,477       285,143
                                      ---------      ---------     ---------
   Income before tax................    365,028        291,409       217,083
   Provision for income tax 
     (note 9).......................    107,037         83,844        57,565
                                      ---------      ---------     ---------
   Net income....................... $  257,991    $   207,565   $   159,518
                                      =========      =========     =========

   Net income per share
      (note 10)..................... $     4.33    $      3.50   $      2.70
                                      =========      =========     =========

          See accompanying notes to consolidated financial statements.

   
<PAGE>

   MGIC Investment Corporation and Subsidiaries - December 31, 1996 and 1995


                           Consolidated Balance Sheet

                                                  1996            1995  
   ASSETS                                          (In thousands of dollars)

   Investment portfolio (note 4):
     Securities, available-for-sale, 
     at market value:
       Fixed maturities...................  $  1,892,081     $1,602,806
       Equity securities..................         4,039          3,836
       Short-term investments.............       140,114         80,579
                                            ------------    -----------

         Total investment portfolio.......     2,036,234      1,687,221

   Cash...................................         3,861          9,685
   Accrued investment income..............        33,363         29,213
   Reinsurance recoverable on loss 
     reserves (note 7)....................        29,827         33,856
   Reinsurance recoverable on unearned 
     premiums (note 7)....................        11,745         15,485
   Home office and equipment, net 
     (note 5).............................        35,050         38,782
   Deferred insurance policy 
     acquisition costs....................        31,956         37,956
   Other assets...........................        40,279         22,521
                                             -----------    -----------
         Total assets.....................  $  2,222,315     $1,874,719
                                             ===========    ===========

   LIABILITIES AND SHAREHOLDERS' EQUITY

   Liabilities:
     Loss reserves (notes 6 and 7)........  $    514,042      $ 371,032
     Unearned premiums (note 7)...........       219,307        251,163
     Mortgages payable (note 5)...........        35,424         35,799
     Income taxes payable (note 9)........        23,111         33,686
     Other liabilities....................        64,316         61,647
                                             -----------    -----------
        Total liabilities.................       856,200        753,327
                                             -----------    -----------

   Contingencies (note 12)

   Shareholders' equity (note 10):
     Common stock, $1 par value, 
       shares authorized 150,000,000; 
       shares issued 60,555,400;
       outstanding 1996 - 58,950,434; 
       1995 - 58,629,420..................        60,555         60,555
     Paid-in surplus......................       268,540        259,430
     Treasury stock (shares at cost 
       1996 - 1,604,966; 1995 -
       1,925,980).........................        (7,073)        (8,172)
     Unrealized appreciation in 
       investments, net of tax............        40,685         54,737
     Retained earnings (note 10)..........     1,003,408        754,842
                                             -----------    -----------

         Total shareholders' equity.......     1,366,115      1,121,392
                                             -----------    -----------
         Total liabilities and 
           shareholders' equity...........    $2,222,315     $1,874,719
                                             ===========    ===========

          See accompanying notes to consolidated financial statements.

   
<PAGE>

   MGIC Investment Corporation and Subsidiaries - Years Ended December 31, 1996
   1995 and 1994

   
<TABLE>

   Consolidated Statement of Shareholders' Equity
   <CAPTION>
  
                                                                                     Unrealized
                                                                                    appreciation
                                         Common       Paid-in         Treasury     (depreciation)    Retained
                                         stock        surplus          stock       in investments    earnings
                                                            (In thousands of dollars)

   <S>                                <C>          <C>              <C>             <C>            <C>    
   Balance, December 31, 1993.......  $  60,555    $   252,710      $   (9,682)     $    2,022     $   406,465
   Net income.......................          -              -               -               -         159,518
   Unrealized investment losses, 
     net............................          -              -               -         (26,330)              -
   Dividends declared...............          -              -               -               -          (9,335)
   Reissuance of treasury stock.....          -          1,635             516               -               -
                                      ---------    -----------     -----------     -----------     -----------
   Balance, December 31, 1994.......     60,555        254,345          (9,166)        (24,308)        556,648

   Net income.......................          -              -               -               -         207,565
   Unrealized investment gains, 
     net............................          -              -               -          79,045               -
   Dividends declared...............          -              -               -               -          (9,371)
   Reissuance of treasury stock.....          -          5,085             994               -               -
                                      ---------    -----------     -----------     -----------     -----------
   Balance, December 31, 1995.......     60,555        259,430          (8,172)         54,737         754,842

   Net income.......................          -              -               -               -         257,991
   Unrealized investment losses, 
     net............................          -              -               -         (14,052)              -
   Dividends declared...............          -              -               -               -          (9,425)
   Reissuance of treasury stock.....          -          9,110           1,099               -               -
                                      ---------    -----------     -----------     -----------     -----------
   Balance, December 31, 1996....... $   60,555    $   268,540    $     (7,073)   $     40,685      $1,003,408
                                      =========    ===========     ===========     ===========     ===========

                                    See accompanying notes to consolidated financial statements.

   </TABLE>


   
<PAGE>

   MGIC  Investment Corporation and Subsidiaries - Years Ended December 31,
   1996, 1995 and 1994

   Consolidated Statement of Cash Flows

                                          1996          1995          1994  
                                                 (In thousands of dollars)

   Cash flows from operating
    activities:
     Net income.....................  $   257,991  $   207,565  $   159,518
     Adjustment to reconcile net 
       income to net cash provided 
       by operating activities:
         Amortization of deferred 
           insurance policy
           acquisition costs........       26,772       29,693       30,849
         Increase in deferred
           insurance policy
           acquisition costs........      (20,772)     (24,748)     (27,965)
         Depreciation and other 
           amortization.............        8,969        8,613        2,644
         Increase in accrued
           investment 
           income...................       (4,150)      (4,876)      (1,701)
         Decrease (increase) in 
           reinsurance recoverable
           on loss reserves.........        4,029         (194)      22,644
         Decrease in reinsurance 
           recoverable on
           unearned 
           premiums.................        3,740        3,791       32,010
         Increase in loss reserves..      143,010       96,563       60,869
         Decrease in unearned
           premiums.................      (31,856)     (29,980)     (25,703)
         Other......................      (19,971)         110      (13,712)
                                         ---------     ---------   ---------    
Net cash provided by operating 
     activities.....................      367,762      286,537      239,453
                                         ---------     ---------   --------- 
   Cash flows from investing
    activities:
     Purchase of fixed maturities:
       Available-for-sale
          securities................   (1,095,559)    (514,458)    (188,762)
       Held-to-maturity securities..            -      (34,521)     (53,885)
     Proceeds from sale or maturity 
       of fixed maturities:
         Available-for-sale
           securities...............      781,099      166,442       79,853
         Held-to-maturity
           securities...............            -       22,615        7,690
                                        ---------     ---------    --------- 
   Net cash used in investing
      activities....................     (314,460)    (359,922)    (155,104)
                                        ---------     ---------    ---------
   Cash flows from financing
     activities:
     Dividends paid to
       shareholders.................       (9,425)      (9,371)      (9,335)
     Principal repayments on
       mortgages payable............         (375)        (348)        (312)
     Reissuance of treasury
       stock........................       10,209        6,079        2,151
                                        ---------     ---------    ---------
   Net cash provided by (used in) 
     financing activities...........          409       (3,640)      (7,496)
                                        ---------     ---------    ---------  
   Net increase (decrease) in cash
    and cash equivalents............       53,711      (77,025)      76,853
   Cash and cash equivalents at 
     beginning of year..............       90,264      167,289       90,436
                                        ----------     ---------   ---------
   Cash and cash equivalents at 
     end of year....................   $  143,975   $   90,264  $   167,289
                                        ==========     =========   =========  

          See accompanying notes to consolidated financial statements.

   
<PAGE>

   MGIC  Investment Corporation and Subsidiaries - December 31, 1996, 1995
   and 1994


   Notes to Consolidated Financial Statements

   1.   Nature of business

   MGIC Investment Corporation ("Company") is a holding company which,
   through Mortgage Guaranty Insurance Corporation ("MGIC") and several other
   subsidiaries, is principally engaged in the mortgage insurance business. 
   The Company provides mortgage insurance to lenders throughout the United
   States to protect against loss from defaults on low down payment
   residential mortgage loans. Through certain other non-insurance
   subsidiaries, the Company also provides various services for the mortgage
   finance industry, such as contract underwriting, premium reconciliation,
   claim administration and portfolio analysis.

   At December 31, 1996, the Company's direct primary insurance in force
   (representing the current principal balance of all mortgage loans that are
   currently insured) and direct primary risk in force was approximately
   $131.4 billion and $29.3 billion, respectively.

   The Company's largest shareholder, The Northwestern Mutual Life Insurance
   Company ("NML"), held approximately 18% of the common stock of the Company
   at December 31, 1996.

   2.   Basis of presentation and summary of significant accounting policies

   The preparation of financial statements in conformity with generally
   accepted accounting principles requires management to make estimates and
   assumptions that affect the reported amounts of assets and liabilities and
   disclosure of contingent assets and liabilities at the date of the
   financial statements and the reported amounts of revenues and expenses
   during the reporting period.  Actual results could differ from those
   estimates.

   Principles of consolidation -- The consolidated financial statements
   include the accounts of MGIC Investment Corporation and its wholly-owned
   subsidiaries.  All intercompany transactions have been eliminated.  The
   Company's 48% investment in Credit-Based Asset Servicing and
   Securitization, LLC ("C-BASS") is accounted for on the equity method.

   Investments -- The Company categorizes its investment portfolio according
   to its ability and intent to hold the investments to maturity.  Fixed
   maturities which are classified as held to maturity are stated at
   amortized cost. Investments which the Company does not have the ability
   and intent to hold to maturity are considered to be available for sale and
   must be recorded at market and the unrealized gains or losses recognized
   as an increase or decrease to shareholders' equity.  Realized investment
   gains and losses are reported in income based upon specific identification
   of securities sold. (See note 4.)

   Home office and equipment -- Home office and equipment is carried at cost
   net of depreciation.  For financial statement reporting purposes,
   depreciation is determined on a straight-line basis for the home office
   and equipment over estimated lives of 45 years and 5 years, respectively. 
   For income tax purposes, the Company uses accelerated depreciation
   methods.  (See note 5.)

   Deferred insurance policy acquisition costs -- The cost of acquiring
   insurance policies, including compensation, premium taxes and other
   underwriting expenses, is deferred, to the extent recoverable, and
   amortized as the related premiums are earned.  No expenses are deferred on
   monthly premium policies.

   Loss reserves -- Reserves are established for reported insurance losses
   and loss adjustment expenses based on when notices of default on insured
   mortgage loans are received. Reserves are also established for estimated
   losses incurred on notices of default not yet reported by the lender. 
   Consistent with industry practices, the Company does not establish loss
   reserves for future claims on insured loans which are not currently in
   default.  Reserves are established by management using estimated claims
   rates and claims amounts in estimating the ultimate loss.  Amounts for
   salvage recoverable are considered in the determination of the reserve
   estimates. Adjustments to reserve estimates are reflected in the financial
   statements in the years in which the adjustments are made. The liability
   for reinsurance assumed is based on information provided by the ceding
   companies.  (See note 6.)

   Income recognition -- The insurance subsidiaries write policies which are
   guaranteed renewable contracts at the insured's option on a single, annual
   or monthly premium basis.  The insurance subsidiaries have no ability to
   reunderwrite or reprice these contracts.  Premiums written on a single
   premium basis and an annual premium basis are initially deferred as
   unearned premium reserve and earned over the policy term.  Premiums
   written on policies covering more than one year are amortized over the
   policy life in accordance with the expiration of risk.  Premiums written
   on annual policies are earned on a monthly pro rata basis.  Premiums
   written on monthly policies are earned as the premiums are due.

   Fee income of the non-insurance subsidiaries is earned as the services are
   provided.

   Income taxes -- The Company and its subsidiaries file a consolidated
   federal income tax return. Prior to August 1991, the Company and its
   subsidiaries filed a consolidated federal income tax return with NML and
   its subsidiaries.  (See note 9.)  

   A formal tax sharing agreement exists between the Company and its
   subsidiaries. Each subsidiary determines income taxes based upon the
   utilization of all tax deferral elections available.  This assumes Tax and
   Loss Bonds are purchased and held to the extent they would have been
   purchased and held on a separate company basis since the tax sharing
   agreement provides that the redemption or non-purchase of such bonds shall
   not increase such member's separate taxable income and tax liability on a
   separate company basis.

   Federal tax law permits mortgage guaranty insurance companies to deduct
   from taxable income, subject to certain limitations, the amounts added to
   contingency loss reserves.  Generally, the amounts so deducted must be
   included in taxable income in the tenth subsequent year.  The deduction is
   allowed only to the extent that U.S. government non-interest bearing Tax
   and Loss Bonds are purchased and held in an amount equal to the tax
   benefit attributable to such deduction.  The Company accounts for these
   purchases as a payment of current federal income taxes.

   Deferred income taxes are provided under the liability method which
   recognizes the future tax effects of temporary differences between amounts
   reported in the financial statements and the tax bases of these items. 
   The expected tax effects are computed at the current federal tax rate.

   Benefit plans -- The Company has a non-contributory defined benefit
   pension plan covering substantially all employees.  Retirement benefits
   are based on compensation and years of service.  The Company's policy is
   to fund pension cost as required under the Employee Retirement Income
   Security Act of 1974.  (See note 8.)

   The Company accrues the estimated costs of retiree medical and life
   benefits over the period during which employees render the service that
   qualifies them for benefits. The Company offers both medical and dental
   benefits for retired employees and their spouses.  Benefits are generally
   funded on a pay-as-you-go basis.  (See note 8.)

   Reinsurance -- Loss reserves and unearned premiums are reported before
   taking credit for amounts ceded under reinsurance treaties.  Ceded loss
   reserves are reflected as "Reinsurance recoverable on loss reserves." 
   Ceded unearned premiums are reflected as "Reinsurance recoverable on
   unearned premiums." The Company remains contingently liable for all
   reinsurance ceded.  (See note 7.)

   Net income per share -- Net income per share is based on the weighted
   average number of common shares and common stock equivalents which would
   arise from the exercise of stock options. 

   The weighted average number of shares used in the net income per share
   computations were as follows (shares in thousands) (see note 10):

        Year ended December 31, 1996  59,523
        Year ended December 31, 1995  59,284
        Year ended December 31, 1994  58,977

   Statement of cash flows -- For purposes of the consolidated statement of
   cash flows, the Company considers short-term investments to be cash
   equivalents, as short-term investments have original maturities of three
   months or less.  Interest paid during 1996, 1995 and 1994 approximates
   interest expense. 

   Reclassifications -- Certain reclassifications have been made in the
   accompanying financial statements to 1995 and 1994 amounts to allow for
   consistent financial reporting.

   3.   Related party transactions

   The Company contracts with Northwestern Mutual Investment Services, Inc.,
   a subsidiary of NML, for investment portfolio management and accounting
   services. The Company incurred expense of $0.9 million, $0.9 million and
   $1.0 million for these services in 1996, 1995 and 1994, respectively.

   4.   Investments
   
   The following table summarizes the Company's investments at December 31, 1996
   and 1995:
  
   
<TABLE>

   <CAPTION>

                                                   Financial                                                          Financial
                              Amortized   Market   Statement                                  Amortized      Market   Statement
                                 Cost     Value      Value                                       Cost         Value     Value
                                   
                                (In thousands of dollars)                                           (In thousands of dollars)
  
   <S>                      <C>         <C>         <C>           <S>                        <C>          <C>         <C>
   At December 31, 1996:                                          At December 31, 1995:

                                                                                    
   Securities, available                                          Securities, available
    for sale:                                                      for sale:
     Fixed maturities....   $1,832,193  $1,892,081  $1,892,081      Fixed maturities....     $1,520,854   $1,602,806  $1,602,806
     Equity securities...        1,333       4,039       4,039      Equity securities...          1,363        3,836       3,836
     Short-term                                                     Short-term
       investments.......      140,114     140,114     140,114        investments.......         80,579       80,579      80,579
                             ---------   ---------   ---------                                 ---------   ---------   ---------
   Total investment                                               Total investment
     portfolio...........   $1,973,640  $2,036,234  $2,036,234      portfolio...........     $1,602,796   $1,687,221  $1,687,221
                             =========   =========   =========                                =========    =========   =========

   </TABLE>


   The amortized cost and market value of investments at December 31, 1996 and
   1995 are as follows:
      
   
<TABLE>

   <CAPTION>

                                                              Gross         Gross
                                               Amortized   Unrealized     Unrealized    Market
   December 31, 1996:                             Cost        Gains         Losses      Value
                                                            (In thousands of dollars)

   <S>                                         <C>        <C>          <C>           <C>               
 
   U.S. Treasury securities and obligations 
     of U.S. government corporations
     and agencies.......................       $  77,498  $    1,483   $    (345)    $   78,636
   Obligations of states and political 
     subdivisions.......................       1,364,790      57,374      (1,437)     1,420,727
   Corporate securities.................         515,482       3,659      (1,304)       517,837
   Mortgage-backed securities...........             571          33           -            604
   Debt securities issued by foreign 
     sovereign governments..............          13,966         425           -         14,391
                                             ----------- ----------- -----------    -----------
         Total debt securities..........       1,972,307      62,974      (3,086)     2,032,195

   Equity securities....................           1,333       2,706           -          4,039
                                             ----------- ----------- -----------     ----------

         Total investment portfolio.....      $1,973,640   $  65,680   $  (3,086)    $2,036,234
                                             =========== =========== ===========    ===========


   December 31, 1995:

                                              <C>          <C>         <C>            <C>             
   U.S. Treasury securities and obligations 
     of U.S. government corporations
     and agencies.......................      $   29,790   $   1,744   $     -        $  31,534
   Obligations of states and political 
     subdivisions.......................       1,251,284      72,615      (1,202)     1,322,697
   Corporate securities.................         316,668       8,712          (1)       325,379
   Mortgage-backed securities...........           3,491          84           -          3,575
   Debt securities issued by foreign 
     sovereign governments..............             200           -           -            200
                                             ----------- ----------- -----------    -----------
         Total debt securities..........       1,601,433      83,155      (1,203)     1,683,385

   Equity securities....................           1,363       2,473           -          3,836
                                             ----------- ----------- -----------    -----------

         Total investment portfolio.............
                                              $1,602,796 $    85,628$     (1,203)    $1,687,221
                                             =========== =========== ===========    ===========
   </TABLE>


   
<PAGE>

   The amortized cost and market values of debt securities at December 31,
   1996, by contractual maturity, are shown below. Debt securities consist of
   fixed maturities and short-term investments. Expected maturities will
   differ from contractual maturities because borrowers may have the right to
   call or prepay obligations with or without call or prepayment penalties.


                                           Amortized          Market
                                              Cost            Value
                                              (In thousands of dollars)


   Due in one year or less................. $   178,014      $   178,367
   Due after one year through five years....    202,686          206,779
   Due after five years through ten years...    836,337          869,736
   Due after ten years......................    754,699          776,709
                                            -----------      -----------

                                              1,971,736        2,031,591

   Mortgage-backed securities...............        571              604
                                            -----------      -----------

   Total at December 31, 1996...............$ 1,972,307       $2,032,195
                                            ===========      ===========

   Net investment income is comprised of the following:

                                           1996           1995          1994
                                            (In thousands of dollars)

   Fixed maturities...............  $    99,832     $   79,328     $  70,501
   Equity securities..............          240            240           240
   Short-term investments.........        6,223          8,498         5,114
   Other..........................           82            409           445
                                   ------------   ------------   -----------
   Investment income..............      106,377         88,475        76,300
   Investment expenses............       (1,022)          (932)       (1,067)
                                   ------------   ------------   -----------

   Net investment income..........  $   105,355     $   87,543     $  75,233
                                   ============   ============   ===========

   The net realized investment gains (losses) and change in net unrealized
   (depreciation) appreciation of investments are as follows:

                                           1996           1995          1994
                                               (In thousands of dollars)
   Net realized investment
     gains (losses), on sale
     of investments:
       Fixed maturities...........  $     1,222     $    1,502     $     353
       Short-term investments.....           (2)            (6)          (17)
                                    -----------    -----------   -----------
                                          1,220          1,496           336
                                    -----------    -----------   -----------

   Change in net unrealized
     (depreciation) appreciation:
       Fixed maturities...........      (22,064)       111,359      (109,720)
     Equity securities............          233            191           260
     Short-term investments.......            -            898          (419)
                                    -----------    -----------    ----------

                                        (21,831)       112,448      (109,879)
                                    -----------    -----------    ----------

   Net realized investment gains
     (losses) and change in net
     unrealized (depreciation)
     appreciation.................  $   (20,611)    $  113,944   $  (109,543)
                                    ===========    ===========    ==========
   
   At November 30, 1995, the Company transferred its entire held-to-maturity
   portfolio with a book value of $557.1 million to the available-for-sale
   portfolio. This transfer resulted in an increase to shareholders' equity
   of $30.3 million, net of tax.

   The gross realized gains and the gross realized losses on sales of
   available-for-sale securities were $8.6 million and $7.4 million,
   respectively in 1996 and $3.3 million and $1.8 million, respectively in
   1995. There were no sales or transfers of held-to-maturity securities
   during 1996 or 1995 other than the transfer on November 30, 1995 of the
   entire held-to-maturity portfolio to available-for-sale.

   5.   Home office and equipment and mortgages payable

   In 1989, a subsidiary of the Company borrowed $37.6 million  secured by
   the home office and substantially all the furniture and fixtures of the
   Company.  The loan bears interest at approximately 10.5% and is due in
   January 1997. The outstanding balance of the loan at December 31, 1996
   approximates market value.

   Home office and equipment is shown net of accumulated depreciation of
   $36.1 million and $30.4 million at December 31, 1996 and 1995,
   respectively.  

   Under the terms of the loan agreement, MGIC must maintain a statutory
   policyholders' surplus of at least $150 million and a claims paying
   ability rating of AA or better with Moody's Investors Service, Inc. and
   Standard & Poor's Corporation.  At December 31, 1996, MGIC had statutory
   policyholders' surplus of $252 million and a claims paying ability rating
   of Aa2 and AA+ from the rating agencies, respectively.

   6.   Loss reserves

   Loss reserve activity was as follows:


                                           1996         1995         1994
                                             (In thousands of dollars)

   Reserve at beginning
     of year......................... $ 371,032   $   274,469  $   213,600
   Less reinsurance recoverable......    33,856        33,662       56,306
                                      ---------   -----------  -----------

   Net reserve at beginning
    of year..........................   337,176       240,807      157,294
   Reserve transfer (1)..............    35,657             -       25,075
                                      ---------   -----------  -----------
   Adjusted reserve at beginning
    of year..........................   372,833       240,807      182,369
   Losses incurred:
     Losses and LAE incurred in
     respect of default notices
     received in:
       Current year..................   312,630       226,439      168,554
       Prior years (2)...............   (78,280)      (36,457)     (15,473)
                                      ---------    ----------  -----------

         Subtotal....................   234,350       189,982      153,081
                                      ---------    ----------  -----------
   Losses paid:
     Losses and LAE paid in
     respect of default notices
     received in:
       Current year..................    16,872        14,115       12,293
       Prior years...................   106,096        79,498       82,350
                                      ---------   -----------  -----------

         Subtotal....................   122,968        93,613       94,643
                                      ---------   -----------  -----------

   Net reserve at end of year........   484,215       337,176      240,807
   Plus reinsurance recoverables.....    29,827        33,856       33,662
                                      ---------   -----------  -----------

   Reserve at end of year............ $ 514,042   $   371,032  $   274,469
                                      =========   ===========  ===========

   (1)  Received in conjunction with the cancellation of certain reinsurance
   treaties. (See note 7.)

   (2)  A negative number for a prior year indicates a redundancy of loss
   reserves, and a positive number for a prior year indicates a deficiency of
   loss reserves.

   The top half of the table above shows losses incurred on default notices
   received in the current year and in prior years, respectively.  The amount
   of losses incurred relating to default notices received in the current
   year represents the estimated amount to be ultimately paid on such default
   notices.  The amount of losses incurred relating to default notices
   received in prior years represents an adjustment made in the current year
   for defaults which were included in the loss reserve at the end of the
   prior year.

   Current year losses incurred increased from 1995 to 1996 primarily due to
   an increase in the notice inventory from 19,980 at December 31, 1995 to
   25,034 at December 31, 1996 resulting from an increasing percentage of the
   Company's insurance in force reaching its peak claim paying years, concern
   with early loss developments on insurance written in 1994 through 1996,
   the continued high level of loss activity in certain high cost geographic
   regions and an increase in claim amounts on defaults with deeper
   coverages.  Offsetting this increase were favorable developments in prior
   years loss reserves, with the net effect of total losses incurred
   increasing from $190.0 million in 1995 to $234.4 million in 1996.

   The favorable development of the reserves in 1996, 1995 and 1994 is
   reflected in the prior year line, and results from the actual claim rates
   and actual claim amounts being lower than those estimated by the Company
   when originally establishing the reserve at December 31, 1995, 1994 and
   1993, respectively.

   The lower half of the table above shows the breakdown between claims paid
   on default notices received in the current year and default notices
   received in prior years.  Since it takes, on average, about twelve months
   for a default which is not cured to develop into a paid claim, most losses
   paid relate to default notices received in prior years.

   7.   Reinsurance

   The Company cedes a portion of its business to reinsurers and records
   assets for reinsurance recoverable on estimated reserves for unpaid losses
   and unearned premiums.  Business written between 1985 and 1993 is ceded
   under various quota share reinsurance agreements with several reinsurers.
   The Company receives a ceding commission in connection with this
   reinsurance. There is no quota share reinsurance on business written
   subsequent to December 31, 1993.

   In September 1996, the Company signed an agreement with Wisconsin Mortgage
   Assurance Corporation ("WMAC") and a WMAC reinsurer to assume all of the
   reinsurer's interest in WMAC mortgage insurance writings, which had been
   previously ceded to that reinsurer. WMAC wrote mortgage insurance on first
   mortgages collateralized by one-to-four-family residences until February
   28, 1985. Under the agreement, the Company assumed reinsurance on
   approximately $4.2 billion of WMAC's insurance in force (representing
   approximately $1.1 billion of risk in force) committed to, or written,
   through February 28, 1985.  As a result, the amount of WMAC's insurance in
   force ceded to the Company increased to approximately $6.2 billion
   (representing $1.6 billion of risk in force), with the portion of WMAC's
   insurance in force reinsured by the Company increasing from approximately
   21 percent to approximately 65 percent.  The Company received
   approximately $40 million as payment for its assumption of existing loss
   and unearned premium reserves related to the insurance in force being
   assumed from WMAC.

   Effective January 1, 1994, the Company agreed with its lead reinsurer to
   reassume its mortgage insurance writings for policy years 1985 through
   1993 which had previously been ceded to the lead reinsurer.

   The effect of reinsurance on premiums earned and losses incurred is as
   follows:

                                        1996          1995          1994
                                            (In thousands of dollars)

   Premiums earned:
     Direct................       $   623,148    $   522,069   $   425,277
     Assumed...............            13,245          8,191        10,205
     Ceded.................           (19,350)       (23,760)      (31,492)
                                  -----------    -----------   -----------

     Net premiums earned...       $   617,043    $   506,500   $   403,990
                                  ===========    ===========   ===========
   Losses incurred:
     Direct................       $   226,702    $   197,490   $   155,766
     Assumed...............            17,073          7,108        14,898
     Ceded.................            (9,425)       (14,616)      (17,583)
                                  -----------    -----------   -----------
     Net losses incurred...       $   234,350    $   189,982   $   153,081
                                  ===========    ===========   ===========


   8.   Benefit plans

   The components of the net periodic pension cost of the Company's defined
   benefit pension plan are as follows:


                                           1996         1995         1994
                                              (In thousands of dollars)

   Service cost........................$  3,378   $    3,118    $    3,475
   Interest on projected
      benefit obligation................  2,777        2,255         2,042
   Actual return on plan assets......... (5,235)      (7,532)          403
   Net amortization and deferral........  2,179        5,375        (2,211)
                                       --------    ---------     ---------

   Net periodic pension cost...........
                                       $   3,099  $    3,216    $    3,709
                                       =========   ==========    ==========

   The following lists the funded status of the pension plan as of December
   31, 1996 and 1995:

                                                    1996              1995
                                              (In thousands of dollars)

   Actuarial present value of
     benefit obligations:
       Vested........................           $  31,654        $   25,553
       Non-vested....................               1,266             1,515
                                               ----------       -----------

   Accumulated benefit obligation....           $  32,920        $   27,068
                                               ==========       ===========

   Projected benefit obligation......           $  42,845        $   35,159
   Net assets available for benefits.              46,256            37,632
                                                ---------       -----------
   Projected benefit obligation less than
     plan assets.....................               3,411             2,473
   Unrecognized net obligation.......               1,583             1,576
                                                ---------       -----------

   Pension asset.....................           $   1,828        $      897
                                                =========       ===========

   The discount rate used in determining the actuarial present value of the
   projected benefit obligation was 7.5% for 1996 and 1995.  The discount
   rate used in determining the pension expense was 7.5% for 1996 and 1995
   and 7% for 1994. The expected long-term rate of return on plan assets was
   7.5% for 1996, 1995 and 1994, and the assumed rate of compensation
   increase was 6% for 1996, 1995 and 1994.  Plan assets consist of fixed
   maturities and equity securities.

   The components of the net periodic postretirement benefit cost of the
   Company's non-pension postretirement benefit plans are as follows:

                                            1996          1995         1994
                                               (In thousands of dollars)


   Service cost........................  $    1,208   $    1,220   $   1,252
   Interest cost on projected
     benefit obligation................       1,171        1,019       1,014
   Actual return on plan assets........        (791)        (806)         (1)
   Net amortization and deferral.......         933        1,131         441
                                        -----------  ----------- -----------
   Net periodic postretirement benefit 
     cost..............................  $    2,521   $    2,564   $   2,706
                                        ===========  =========== ===========


   The Company's liability for the unfunded accumulated postretirement
   benefit obligation as of December 31, 1996 and 1995, is as follows:


                                                       1996            1995
                                                    (In thousands of dollars)


   Actuarial present value of accumulated
     postretirement benefit obligation:
       Retirees...................................   $    3,869     $   2,347
       Active employees eligible to retire........        1,936         2,230
       Active employees ineligible to retire......       12,010        11,121
                                                     ----------   -----------
   Total accumulated postretirement
     benefit obligation...........................       17,815        15,698
   Fair value of assets...........................       (6,248)       (4,488)
   Unrecognized transition obligation.............       (8,479)       (9,009)
   Unrecognized net obligation 
     relating to plan and discount 
     rate changes.................................        2,185         1,653
                                                     ----------   -----------
   Accrued postretirement liability...............   $    5,273     $   3,854
                                                    ===========   ===========

   The Company is amortizing the unrecognized transition obligation over 20
   years. The discount rate used in determining the accumulated
   postretirement benefit obligation was 7.5% for 1996 and 1995.  The
   expected long-term rate of return on plan assets was 7.5% for 1996, 1995
   and 1994. The assumed health care cost trend rate used in measuring the
   accumulated postretirement benefit obligation is 9.5% reduced over a
   period of 6 years to 6%.  The effect of a 1% increase in the health care
   trend rate assumption would result in an increase of 22% in the
   accumulated postretirement benefit obligation from $17.8 million to
   approximately $21.7 million.

   9.   Income taxes

   The components of the net deferred tax liability as of December 31, 1996
   and 1995 are as follows:

                                                      1996        1995
                                                   (In thousands of dollars)

   Unearned premium reserves...................   $   (19,571)    $ (20,780)
   Deferred policy acquisition costs...........        11,184        13,284
   Loss reserves...............................         1,559         9,289
   Unrealized appreciation in investments......        21,908        29,474
   Other.......................................        (3,901)       (2,197)
                                                  -----------    ----------
   Net deferred tax liability..................   $    11,179     $  29,070
                                                  ===========    ==========

   At December 31, 1996, gross deferred tax assets and liabilities amounted
   to $29.9 million and $41.1 million, respectively.  Management believes
   that all gross deferred tax assets at December 31, 1996 are fully
   realizable and no valuation reserve has been established.

   The following summarizes the components of the provision for income tax:

                                           1996         1995         1994
                                             (In thousands of dollars)

   Federal:
     Current......................... $   116,160    $   87,627   $  62,081
     Deferred........................     (10,325)       (5,117)     (4,700)
   State.............................       1,202         1,334         184
                                      -----------    ----------  ----------
   Total provision................... $   107,037    $   83,844   $  57,565
                                      ===========    ==========  ==========

   The Company purchased $93.6 million, $72.0 million and $53.0 million of
   non-interest bearing U.S. Government Tax and Loss Bonds as a payment of
   current taxes in 1996, 1995 and 1994, respectively.  The Company also paid
   $10.3 million, $8.5 million and $9.3 million in estimated federal income
   taxes in 1996, 1995 and 1994, respectively.

   The reconciliation of the provisions for income taxes computed at the
   federal tax rate of 35% to the reported provision for income taxes is as
   follows:


                                           1996           1995         1994
                                              (In thousands of dollars)

   Tax provision computed at
     federal tax rate...............  $   127,760    $  101,993   $  75,979
   (Decrease) increase in tax
     provision resulting from:
       Tax exempt municipal
         bond interest..............      (22,114)      (18,955)    (19,066)
       Other, net...................        1,391           806         652
                                       ----------    ----------  ----------

   Total income tax provision.......  $   107,037    $   83,844   $  57,565
                                       ==========    ==========  ==========


   The Company and its subsidiaries have a continuing obligation to reimburse
   NML for the tax effect of any changes in taxable income of the Company
   relating to periods during which the Company and its subsidiaries were
   members with NML and its subsidiaries of a consolidated return for federal
   income tax purposes.  At December 31, 1996, no amount was owed to NML.

   The Internal Revenue Service ("IRS") is presently examining the Company's
   income tax returns for 1991 and 1992. The Company has received proposed
   tax assessments relating to 1989 and 1990.  Management does not agree with
   all of the findings of the IRS and has 
   appealed the proposed tax assessments.

   In examinations through 1988 the IRS had proposed to delay the deduction
   for loss reserves on mortgage loans in default until the lender takes
   title to the mortgaged property.  In August 1992, this issue was decided
   in favor of another private mortgage insurer by the Court of Appeals for
   the federal circuit applicable to the Company. However, the IRS has
   continued to pursue this position with other private mortgage insurers in
   other circuits.

   Management believes that adequate provision has been made in the financial
   statements for any amounts which may become due with respect to the open
   years.

   10.  Shareholders' equity and dividend restrictions

   The Company's insurance subsidiaries are subject to statutory regulations
   as to maintenance of policyholders' surplus and payment of dividends.  The
   maximum amount of dividends that the insurance subsidiaries may pay in any
   twelve-month period without regulatory approval by the Office of the
   Commissioner of Insurance of the State of Wisconsin ("OCI") is the lesser
   of adjusted statutory net income or 10% of statutory policyholders'
   surplus as of the preceding calendar year end.  Adjusted statutory net
   income is defined for this purpose to be the greater of statutory net
   income, net of realized investment gains, for the calendar year preceding
   the date of the dividend or statutory net income, net of realized
   investment gains, for the three calendar years preceding the date of the
   dividend less dividends paid within the first two of the preceding three
   calendar years.  In 1997, MGIC can pay $25.2 million of dividends and the
   other insurance subsidiaries of the Company can pay $3.0 million of
   dividends without such regulatory approval.

   Certain of the Company's non-insurance subsidiaries also have requirements
   as to maintenance of net worth.  These restrictions could also affect the
   Company's ability to pay dividends.  In 1996, 1995 and 1994, the Company
   paid dividends of $9.4 million, $9.4 million and $9.3 million,
   respectively or $0.16 per share. In 1997, the Company can pay dividends of
   $35.5 million from its own funds and funds available from the non-
   insurance subsidiaries.

   The principles used in determining statutory financial amounts differ from
   generally accepted accounting principles ("GAAP"), primarily for the
   following reasons:

        Under statutory accounting practices, mortgage guaranty insurance
        companies are required to maintain contingency loss reserves equal to 
        50% of premiums earned.  Such amounts cannot be withdrawn for a period
        of ten years except as permitted by insurance regulations.  Contingency
        loss reserves are not reflected as liabilities under GAAP.

        Under statutory accounting practices, insurance policy acquisition
        costs are charged against operations in the year incurred.  Under
        GAAP, these costs are deferred and amortized as the related premiums
        are earned commensurate with the expiration of risk.

        Statutory financial statements only include a provision for current
        income taxes due, and purchases of Tax and Loss Bonds are accounted
        for as investments.  GAAP financial statements provide for deferred
        income taxes, and purchases of Tax and Loss Bonds are recorded as
        payments of current income taxes.

        Under statutory accounting practices, fixed maturity investments are
        valued at amortized cost.  Under GAAP, those investments which the
        Company does not have the ability and intent to hold to maturity are
        considered to be available for sale and are recorded at market, with
        the unrealized gain or loss recognized, net of tax, as an increase or
        decrease to shareholders' equity.

   The statutory net income, equity and the contingency reserve liability of
   the insurance subsidiaries (excluding the non-insurance companies) are as
   follows:


               Year Ended         Net                       Contingency
              December 31,       Income         Equity        Reserve
                                      (In thousands of dollars)

                   1996   $     67,094    $   274,118     $1,317,438
                   1995         38,975        229,305      1,030,232
                   1994         11,462        202,516        781,438

   The differences between the statutory net income and equity presented
   above for the insurance subsidiaries and the consolidated net income and
   equity presented on a GAAP basis primarily represent the differences
   between GAAP and statutory accounting practices.

   The Company has two stock option plans which permit certain officers and
   employees to purchase common stock at specified prices, not less than the
   market price at the date the options were granted.  A summary of activity
   in the stock option plans during 1994, 1995 and 1996 is as follows:


                                                Average          Shares
                                               Exercise         Subject
                                                 Price         to Option

   Outstanding, December 31, 1993..........$        8.36        1,275,800
     Granted...............................        31.25          703,000
     Exercised.............................         5.59          (84,200)
     Canceled..............................        15.44          (25,000)
                                            ------------      -----------

   Outstanding, December 31, 1994..........        17.00        1,869,600

     Granted...............................        36.15           33,333
     Exercised.............................         8.98         (225,390)
     Canceled..............................        30.62          (21,260)
                                             -----------      -----------

   Outstanding, December 31, 1995..........        18.30        1,656,283
     Granted...............................        61.14           30,667
     Exercised.............................         9.60         (318,327)
     Canceled..............................        30.81          (66,310)
                                             -----------      -----------

   Outstanding, December 31, 1996.......... $      20.80        1,302,313
                                             ===========      ===========


   The exercise price of the options granted in 1995 and 1996 was equal to
   the market value of the stock on the date of grant. The options are
   exercisable between one and ten years after the date of grant.  At
   December 31, 1996, 1,146,042 shares were available for future grant under
   the stock option plans.

   The Company adopted the disclosure only option under Statement of
   Financial Accounting Standards No. 123, Accounting for Stock-Based
   Compensation.  If the accounting provisions of the new Statement had been
   adopted as of the beginning of 1995, the effect on 1995 and 1996 net
   income would have been immaterial.

   The following is a summary of stock options outstanding at December 31,
   1996:

                                   Options                      Options
                                 Outstanding                  Exercisable
                         _____________________________   __________________ 

                                  Remaining   Average               Average
    Exercise                       Average    Exercise             Exercise
   Price Range           Shares  Life (yrs.)   Price      Shares     Price

   $5.00 - $6.89        551,100       3.8    $  6.58    551,100  $   6.58
   $19.25 - $41.75      720,546       6.8      29.95    290,750     28.74
   $53.375 - $64.375     30,667       9.2      61.14          -         -
                      ---------     -----    -------    -------   -------
   Total              1,302,313       5.6    $ 20.80    841,850   $ 14.24
                      =========     =====    =======    =======   =======


   At December 31, 1995 and 1994, option shares of 837,372 and 772,560 were
   exercisable at an average exercise price of $10.41 and $7.10,
   respectively.  The Company also granted an immaterial amount of equity
   instruments other than options during 1995 and 1996.

   11.  Leases

   The Company leases certain office space as well as data processing
   equipment and autos under operating leases that expire during the next six
   years.  Generally, all rental payments are fixed.

   Total rental expense under operating leases was $5.1 million, $4.5 million
   and $5.8 million in 1996, 1995 and 1994, respectively.

   At December 31, 1996, minimum future operating lease payments are as
   follows (in thousands of dollars):

             1997..............     $      4,223
             1998..............            1,884
             1999..............              941
             2000..............              497
             2001..............              309
             2002..............               40
                                     -----------
             Total                  $      7,894
                                     ===========
   12.  Contingencies

   The Company is involved in litigation in the normal course of business. 
   In the opinion of management, the ultimate disposition of the pending
   litigation will not have a material adverse effect on the financial
   position of the Company.

   MGIC is a defendant in a lawsuit commenced by a borrower challenging the
   necessity of maintaining mortgage insurance in certain circumstances,
   primarily when the loan-to-value ratio is below 80%.  The lawsuit purports
   to be brought on behalf of a class of borrowers.  This case appears to be
   based to some degree upon guidelines issued by the Federal Home Loan
   Mortgage Corporation or the Federal National Mortgage Association to their
   respective mortgage servicers under which the mortgage servicers may be
   required in certain circumstances to cancel borrower-purchased insurance
   upon the borrower's request.  The plaintiff alleges that MGIC has a common
   law duty to inform a borrower that the insurance may be canceled in these
   circumstances. The relief sought is equitable relief as well as the return
   of premiums paid after the insurance was cancelable under the applicable
   guidelines.  The Company believes that MGIC has a meritorious defense to
   this action in that, in the absence of a specific statute (no statutory
   duty other than under a general consumer fraud statute is alleged), there
   appears to be no legal authority requiring a mortgage insurer to inform a
   borrower that insurance may be canceled. Summary judgment was granted to
   MGIC in another case involving similar issues. Similar cases are pending
   against other mortgage insurers, mortgage lenders and mortgage loan
   servicers.

   See note 9 for a description of federal income tax contingencies.

   1996

 
  Report of Independent Accountants

   To the Board of Directors & Shareholders of MGIC Investment Corporation

   In our opinion, the accompanying consolidated balance sheet and the
   related consolidated statements of operations, of shareholders' equity and
   of cash flows present fairly, in all material respects, the financial
   position of MGIC Investment Corporation and Subsidiaries (the "Company")
   at December 31, 1996 and 1995, and the results of their operations and
   their cash flows for each of the three years in the period ended December
   31, 1996, in conformity with generally accepted accounting principles. 
   These financial statements are the responsibility of the Company's
   management; our responsibility is to express an opinion on these financial
   statements based on our audits.  We conducted our audits of these
   statements in accordance with generally accepted auditing standards which
   require that we plan and perform the audit to obtain reasonable assurance
   about whether the financial statements are free of material misstatement. 
   An audit includes examining, on a test basis, evidence supporting the
   amounts and disclosures in the financial statements, assessing the
   accounting principles used and significant estimates made by management,
   and evaluating the overall financial statement presentation.  We believe
   that our audits provide a reasonable basis for the opinion expressed
   above.


   PRICE WATERHOUSE LLP

   Milwaukee, Wisconsin
   January 8, 1997


   
<PAGE>

   
<TABLE>

   1996

   Unaudited Quarterly Financial Data

   <CAPTION>

                                                           Quarter                              1996
   1996                            First           Second         Third          Fourth         Year
                                  
                                      (In thousands of dollars, except per share data)

   <S>                           <C>           <C>           <C>            <C>            <C>      

   Net premiums written.....     $ 123,528     $  141,584    $   158,532    $   165,283    $   588,927
   Net premiums earned .....       144,640        150,727        156,779        164,897        617,043
   Investment income, 
     net of expenses .......        24,261         25,191         26,926         28,977        105,355
   Losses incurred, net.....        56,837         56,889         60,247         60,377        234,350
   Underwriting and other 
     expenses ..............        35,704         37,626         36,401         36,752        146,483
   Net income ..............        58,460         62,650         65,785         71,096        257,991
   Net income per share
    (a) ....................          0.98           1.05           1.11           1.19           4.33


   <CAPTION>

                                                           Quarter                              1995
   1995                            First           Second         Third          Fourth         Year
                                  
                                      (In thousands of dollars, except per share data)

   <S>                           <C>          <C>            <C>            <C>            <C>           
  
   Net premiums written.....     $  97,914    $   118,143    $   127,710    $   136,545    $   480,312
   Net premiums earned......       114,415        122,358        130,611        139,116        506,500
   Investment income, 
     net of expenses........        20,295         21,205         22,339         23,704         87,543
   Losses incurred, net.....        43,338         44,009         49,687         52,948        189,982
   Underwriting and other 
     expenses ..............        34,317         35,105         33,892         34,245        137,559
   Net income ..............        45,218         49,945         53,664         58,738        207,565
   Net income per share
    (a).....................          0.76           0.84           0.90           0.99           3.50


   (a)  Due to the use of weighted average shares outstanding when calculating earnings per share, the sum of the quarterly per
        share data may not equal the per share data for the year.

   </TABLE>


   
<PAGE>

   MGIC Stock

   MGIC Investment Corporation Common Stock is listed on the New York Stock
   Exchange under the symbol MTG. At December 31, 1996, 58,950,434 shares
   were outstanding. The following table sets forth for 1995 and 1996 by
   quarter the high and low sales prices of the Company's common stock on the
   New York Stock Exchange Composite Tape.


                          1995                             1996
   Quarters        High           Low            High                 Low


   1st          $42.375         $32.75         $65.25               $50.50
   2nd            52.25         40.375          61.50               51.625
   3rd           58.375         46.125          69.50                53.50
   4th            62.00          49.50          77.75               66.125

   In 1995 and 1996 the Company declared and paid the following cash
   dividends.

   Quarters        1995           1996

   1st             $.04           $.04
   2nd              .04            .04
   3rd              .04            .04
   4th              .04            .04
                 ------         ------
                   $.16           $.16
                 ======         ======

   See Note 10 to the Consolidated Financial Statements for information
   relating to restrictions on the payment of cash dividends.

   As of February 25, 1997, the number of shareholders of record was 366. In
   addition, there were an estimated 33,000 beneficial owners of shares held
   by brokers and fiduciaries.



                                                                 EXHIBIT 21

                           MGIC INVESTMENT CORPORATION

         DIRECT AND INDIRECT SUBSIDIARIES OF MGIC INVESTMENT CORPORATION


                    1.      MGIC Assurance Corporation

                    2.      MGIC Insurance Services Corporation

                    3.      MGIC Investor Services Corporation

                    4.      MGIC Mortgage Insurance Corporation

                    5.      MGIC Mortgage Marketing Corporation

                    6.      MGIC Mortgage Reinsurance Corporation

                    7.      MGIC Mortgage Securities Corporation

                    8.      MGIC Real Estate Servicing Corporation

                    9.      MGIC Reinsurance Corporation

                   10.      MGIC Reinsurance Corporation of Wisconsin

                   11.      MGIC Residential Reinsurance Corporation

                   12.      Mortgage Guaranty Insurance Corporation 

                   13.      Mortgage Guaranty Reinsurance Corporation


   __________________________
   1    As of March 1, 1997.  All subsidiaries listed are 100% directly or
        indirectly owned by the registrant and all are incorporated in
        Wisconsin.






                                                                 EXHIBIT 23


   CONSENT OF INDEPENDENT ACCOUNTANTS


   We hereby consent to the incorporation by reference in the Registration
   Statements listed below of MGIC Investment Corporation of our report dated
   January 8, 1997 appearing on page 27 of the 1996 Annual Report to
   Shareholders which is incorporated in this Annual Report on Form 10-K.  We
   also consent to the incorporation by reference of our report on the
   financial Statement Schedules, which appears on page 32 of this Form 10-K.


        1.   Registration Statement on Form S-8 (Registration No. 33-42120)

        2.   Registration Statement on Form S-8 (Registration No. 33-43543)



   PRICE WATERHOUSE LLP


   Milwaukee, Wisconsin
   March 12, 1997






<TABLE> <S> <C>

<ARTICLE> 7
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY INFORMATION EXTRACTED FROM FORM 10-K FOR THE YEAR
ENDED DECEMBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
       
<S>                             <C>
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          DEC-31-1996
<PERIOD-END>                               DEC-31-1996
<DEBT-HELD-FOR-SALE>                         1,892,081
<DEBT-CARRYING-VALUE>                                0
<DEBT-MARKET-VALUE>                                  0
<EQUITIES>                                       4,039
<MORTGAGE>                                           0
<REAL-ESTATE>                                        0
<TOTAL-INVEST>                               2,036,234
<CASH>                                         143,975
<RECOVER-REINSURE>                                   0
<DEFERRED-ACQUISITION>                          31,956
<TOTAL-ASSETS>                               2,222,315
<POLICY-LOSSES>                                514,042
<UNEARNED-PREMIUMS>                            219,307
<POLICY-OTHER>                                       0
<POLICY-HOLDER-FUNDS>                                0
<NOTES-PAYABLE>                                 35,424
<PREFERRED-MANDATORY>                                0
<PREFERRED>                                          0
<COMMON>                                        60,555
<OTHER-SE>                                   1,305,560
<TOTAL-LIABILITY-AND-EQUITY>                 2,222,315
<PREMIUMS>                                     617,043
<INVESTMENT-INCOME>                            105,355
<INVESTMENT-GAINS>                               1,220
<OTHER-INCOME>                                  22,013
<BENEFITS>                                     234,350
<UNDERWRITING-AMORTIZATION>                      6,000
<UNDERWRITING-OTHER>                           140,483
<INCOME-PRETAX>                                365,028
<INCOME-TAX>                                   107,037
<INCOME-CONTINUING>                            257,991
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   257,991
<EPS-PRIMARY>                                     4.33
<EPS-DILUTED>                                     4.33
<RESERVE-OPEN>                                 372,833
<PROVISION-CURRENT>                            312,630
<PROVISION-PRIOR>                             (78,280)
<PAYMENTS-CURRENT>                              16,872
<PAYMENTS-PRIOR>                               106,096
<RESERVE-CLOSE>                                484,215
<CUMULATIVE-DEFICIENCY>                              0

        

</TABLE>