Max Re Capital Ltd. is the latest Bermuda insurer and reinsurer to announce record profits for 2006.

For last year's fourth quarter, the company swung to a net income of $95.4 million, or $1.51 per share, from a net loss of $12.6 million, or $0.22 per share, in 2005.

But gross premiums written by Max Re in the fourth quarter fell by around $110 million from the same three months in 2005, from $257.2 million to $147.5 million. Full-year gross premiums were also significantly lower, $865.2 million in 2006, versus $1.24 billion for 2005.

Max Re said this decline was due to decreased life and annuity business and lower additional premiums recorded on prior-year contracts in 2006.

Max Re endured some upheavals in 2006, especially the resignation of former chief executive officer Robert Cooney in October after the company had restated five years of earnings following a company probe into finite-risk contracts.

Full-year net operating income for 2006 was $222.7 million, or $3.52 per share, compared to $10.2 million, or $0.19 per share, in 2005.

Meanwhile, Max Re announced that Keith S. Hynes, the company's chief financial officer intends to retire on April 1, 2007.

Mr. Hynes, who is one of the longest-serving insurance company CFOs in Bermuda, will be succeeded by Joe Roberts, who is currently senior vice-president and controller.

Mr. Cooney's replacement as CEO, W. Marston Becker, said: "Our success in 2006 is largely attributable to our employees' combined energies and discipline, which produced strong underwriting performance across all of our business units.

"Our balanced specialty insurance and reinsurance focus together with good investment returns produced a year of record earnings and our fourth consecutive year of net profits. With the pending establishment of our US platform, we will be well-positioned to continue our success in 2007."

Max Re enjoyed an improvement in investment income, to $150 million from $106.8 million in 2005, and to $40.8 million for the final quarter compared to $31.2 million in the same period in 2005.

Max Re invests a significant amount of the premiums it receives in hedge funds. In the third quarter, the company made a $31 million loss on these alternative investments, prompting the insurer to announce its intention to reduce the percentage of invested assets in them. In the fourth quarter, the alternative investments bounced back to a $66.5 million net income - a return of 5.31 percent.

The company's earnings statement, released on Saturday, said invested assets were $4.5 billion at the end of 2006, with around 77 percent in cash and fixed maturities and 23 percent in alternative investments.

Max Re also revealed that administrative expenses for the year 2006, shot up by more than $20 million, from $26.2 million in 2005 to $87.4 million last year. The company said this increase reflected higher costs related to senior management changes and additional costs related to the previously disclosed internal investigation.

Two more appointments were also announced by Max Re on Saturday.

N. James Tees, previously the company's senior vice-president, treasurer and secretary, has been named executive vice-president and chief risk officer, effective immediately.

Aned Sarene A. Bourdages, previously the company's senior vice-president and general counsel, has been promoted to executive vice-president and general counsel, also effective immediately.

The Max Re board also declared a quarterly dividend of $0.07 per share. The dividend is payable on March 9, to shareholders of record as of February 23, 2007.