Oil Casualty Insurance Ltd.?s net income fell 25.3 percent to $62.3 million in 2004 as net losses doubled to $15.1 million and net investment income declined slightly.

But the energy industry mutual insurer said that the year had been successful, as it increased total assets, shareholders? equity and new members.

For the 12 months to December 31, 2004, the Bermuda-based company recorded net income of $62.3 million compared to $83.51 million in 2003.

Total premiums earned in 2004 rose 4.2 percent to $91.3 million, while umbrella general liability (UGL) premiums written 2004 increased by 3.8 percent to $84 million.

The company has also scaled back its underwriting in the directors and officers sector, citing concerns over over-capacity.

John Thomson, senior vice president and chief operating officer said membership grew for another year and that at year end the company had a record 80 shareholders, five of which joined as new members during 2004.

According to Mr. Thomson, the company?s strategy to diversify its shareholder base continues to yield positive results.

?OCIL?s representation in geographies outside North America continues to grow; three of our five new members are based in Europe,? he said.

?By the end of the fiscal year, 43 percent of the total membership came from outside the US. The new shareholders represent various energy operations including utilities, exploration and production and chemicals.

Mr. Thomson said shareholders? equity stood at a record $477.7 million, up $62.3 million or 15 percent on the previous year.

The company?s continued focus on maintaining underlying stability via strong capital management - to improve the risk/return ratio for its Shareholders - was endorsed by Standard & Poor?s (S&P) Rating Services, a statement from the company said.

OCIL received an A- (stable outlook) counterparty and financial strength rating from S&P. S&P stated that the 2004 rating reflected ?OCIL?s strong capital position and limited risk retention?.

OCIL solidified its capital position even further by undertaking its first capital markets financial transaction in September 2004. The company issued $200 million of deferrable subordinated debentures with a 30 year final maturity.

The transaction generated additional statutory capital at interest rates that will give the company increased financial flexibility and allow it to reduce its reliance on higher cost reinsurance.

?The company maintained a diversified mix of global fixed income and international as well as US equities in its investment portfolio which enabled OCIL to ride out the volatilities of the market,? said Roger Paschke, Senior Vice President, Chief Financial Officer and Treasurer.

?As a result of this diversification OCIL?s portfolio was able to deliver another strong return for the year, for the benefit of our Shareholders.?

OCIL?s investment portfolio returned 11.1 percent for the fiscal year, the second consecutive year of double digit returns.