Bermuda-based reinsurer, Mid Ocean Ltd., has reported a 42 percent increase in net income for the third quarter ending July 31 to $65.5 million ($1.72 per share) on revenues of $169.3 million, up 26 percent.

Gross written premiums were down two percent to $114.1 million. Net premiums earned were up 12 percent to $128 million. Net operating income, excluding net gains and losses on investments, rose 11 percent to $60.4 million.

Net investment income, excluding net gains or losses on investments, was up 28 percent to $27 million. Net investment gains were $5.1 million, compared to a net loss of $8.4 million in the third quarter of 1996.

President and CEO, Michael A. Butt, said: "Mid Ocean experienced very positive financial results for the quarter. Once again, the results were favourably affected by the lack of loss activity and the continuing positive developments of our prior year's loss reserves. We also benefited from positive investment experience compared to the prior year.

"These results were gratifying given they have been achieved in a highly competitive marketplace. This environment, combined with our disciplined underwriting approach, is generating declines in premium volumes in several segments of our business.'' Last month Mid Ocean said it had accepted valid tenders for over 90 percent of the outstanding shares of The Brockbank Group plc, and intended on compulsorily acquiring the remaining shares, to bring the Brockbank acquisition to completion.

Mr. Butt said the total cost of acquiring all of the outstanding Brockbank shares is estimated to be some 85.6 million pounds sterling ($135.7 million), of which $51.6 million pounds sterling will be in cash and loan notes and the remainder in some 920,000 newly issued ordinary shares of Mid Ocean Ltd.

stock, subject to certain transfer restrictions.

In addition, it is estimated that the acquisition of the share options of Brockbank employees will cost an additional 2.5 million pounds sterling, which will be payable, at each option holder's choice in cash, Mid Ocean shares or options for the shares.

Mr. Butt said, "We can now work as a single team to develop more channels of business that would not otherwise have been available to us, as well as the opportunity to build the best underwriting team in the London market.'' Third quarter results have brought net income for the first three quarters up 16 percent over last year to $180.4 million. Earnings per share jumped 60 cents to $4.81.

Total revenues for the first nine months are up 18 percent to $458.7 million, gross written premiums were down two percent to $511.8 million, and net premiums earned were up 15 percent to $366.9 million.

Net investment income for the first three quarters was $76.2 million, a $16.2-million improvement over the first nine months of 1996. Net gains on investments were $4.4 million, compared to net losses of $1.2 million.