Bermuda-based Scottish Re Group Ltd. this week reported that its profits had gone up 40 percent for the first quarter of 2004 to $10.1 million after a huge increase in revenue after increasing its market share in North American and Europe.

The company, which changed its name from Scottish Annuity last year in a bid to rebrand itself, reported net income for the same period in 2003 of $7.2 million.

"Over the past five years, Scottish Re has evolved from a reasonable good idea in to one of the world's leading professional life reinsurers," said Scott Willkomm, president of Scottish Re Group Ltd. "We have the people, the knowledge and the financial resources to capitalise on favourable market opportunities to grow our business and produce superior risk adjusted returns.

"This is demonstrated by the knowledge that the franchise we have built is now the number six market share leader in the North American life reinsurance business and one of the emerging leaders in the European life reinsurance markets."

The company reported that income from continuing operations for the quarter ended March 31, 2004 was $10.1 million, compared to $7.4 million for the prior year period.

Net operating earnings were $16.6 million for the quarter ended March 31, 2004 as compared to $9.4 million for the prior year period.

"We are pleased to report that net operating earnings increased 77 percent in the first quarter as compared to last year's results," said Michael French, chairman and chief executive officer of Scottish Re Group Ltd. "On a per share basis, net operating earning increased 32 percent in the first quarter over last year."

Total revenue for the quarter increased to $179.2 million from $96.8 million for the prior year period, an increase of 85 percent.

Excluding realised gains and losses and the change in fair value of the embedded derivative, total revenue for the quarter increased to $186.4 million from $99.1 million for the prior year period, an increase of 88 percent.

Total benefits and expenses increased to $167.9 million for the quarter from $89.1 million, an increase of 88 percent after the company bought Scottish Re Life Corporation (previously ERC Life) and growth in the company's reinsurance business in North America.

The company's total assets were $6.4 billion as of March 31, 2004. The core investment portfolio, comprising fixed maturity investments and most of the cash and cash equivalents, totalled $2.7 billion, and had an average quality rating of "AA minus", an effective duration of 3.8 years and a weighted average book yield of 4.4 percent.

This compares with a portfolio balance of $2.4 billion, an average quality rating of "AA-", effective duration of 3.9 years and an average book yield of 4.5 percent as of December 31, 2003.

As of March 31, 2004, the company had reinsurance in-force of approximately $286 billion covering 6.9 million individual lives with an average benefit per life of $41,000 in its North American operations. As of December 31, 2003, the company had reinsurance in-force of approximately $275 billion covering 6.2 million lives and an average benefit per life of $43,000.