the fourth quarter ended November 30, trimming their over all net earnings for the year 1994 to $144 million or $2.65 a share.

The results contrast with 1993 when the company reported fourth quarter profits of $88.6 million ($1.60 per share) and a year end profit of $379 million ($6.82 per share).

Excluding realised investment gains and losses, operating income was $64.9 million or $1.20 per share in the 1994 fourth quarter, compared with $54 million or $0.98 per share in 1993's fourth quarter.

For the full year, excluding realised investment gains and losses, the operating income was $239 million or $4.40 a share, compared with 1993 figures of $218 million operating income or $3.93 per share.

Realised losses included in 1994's fourth quarter and full year net income were $68 million ($1.26 per share) and $95 million ($1.75 per share), respectively, compared with gains of $35 million ($0.62 per share) and $161 million ($2.89 per share) in the respective 1993 periods.

Mr. Brian O'Hara, president and CEO of EXEL Ltd. stated: "Realised investment losses in the fourth quarter masked a more than 20 percent increase in operating income.

"I am pleased with the continuing growth in operating income which occurred this year, despite increased competition in all of our major lines.

"As we have previously commented, it would have been difficult to realise similar levels of net income in 1994 after 1993's outstanding investment performance.

"A total return investment strategy will have a more volatile short term impact on reported results. However, the losses taken this year and the subsequent reinvestment of funds at higher yields have already begun to benefit the company through increases in net investment income.'' Net investment income, excluding realised gains and losses, was $48 million in the fourth quarter of 1994, compared with $41 million in 1993. For the year, net investment income, excluding realised gains and losses was $182 million in 1994, versus $164 million in 1993.

Revenues for the fourth quarter of 1994 were $117 million, compared with $198 million in the fourth quarter of 1993. For the year, revenues were $633 million in 1994 versus $800 million in 1993. The decrease in revenue reflects the realised investment losses taken in 1994 compared with the realised investment gains in 1993.

Total assets at November 30 were $3.9 billion, up from $3.6 billion a year before. Shareholders' equity was $1.7 billion, compared with $1.8 billion the year before. Fully diluted book value per share was $31.45 compared with $33.61 the year before.

Gross premiums written were up 13 percent for the year, rising from $564 million for 1993 to $638 million for 1994. Fourth quarter gross premiums written for 1994 were $152 million compared with $164 million in the same quarter of 1993.

Net premiums earned for the fourth quarter of 1994 were $126 million, up eight percent from the prior year's fourth quarter of $117 million. For the year, net premiums earned were $521 million in 1994, compared with $457 million in 1993, an increase of 14 percent.

After adjusting for the company's aggregate excess of loss reinsurance premium of $26 million ceded in 1993 (which was subsequently commuted) and $12 million in 1994 relating to surcharges on insureds with adverse loss experience in prior years, adjusted net premiums earned in the fourth quarter of 1994 were $126 million, up two percent from $124 million in the previous year's fourth quarter.

Full year 1994 adjusted net premiums earned were $383 million, an increase of five percent from 1993's $365 million.

The combined ratio for the fourth quarter of 1994 was 95.7 percent compared with 93 percent in the same quarter of 1993. The loss and loss expense ratios were 77.8 percent and 77.2 percent, respectively, and the underwriting expense ratios were 17.9 percent compared with 15.8 percent.

The full year combined ratio was 93.7 percent in 1994 compared with 91.9 percent in 1993. The loss ratio was 78.1 percent in 1994 and 77.3 percent in 1993, with the underwriting expense ratio for the respective years being 15.6 percent and 14.6 percent.

The company said that the higher loss ratio in 1994 included the impact of loss surcharges which are booked at 100 percent loss ratio rather than the expected loss ratio.

The 1994 expense loss ratio reflects increased costs related to operating in a more competitive environment and higher costs associated with a retroactive pension plan for directors.

In 1993, the expense ratio benefited from fees related to services provided to Mid Ocean Reinsurance Company Limited. After adjusting for the impact of the pension plan in 1994 and fee income in 1993, the expense ratios in the fourth quarters of 1994 and 1993 were 16.3 percent and 16.4 percent, respectively, and 15.2 percent and 15 percent for the respective 1994 and 1993 annual periods.

In the fourth quarter of 1994, the company earned $11 million from its equity in net earnings of its affiliate, Mid Ocean Ltd., compared with $5 million in the similar period of 1993. The company's equity in the net earnings of Mid Ocean Ltd. for 1994 was $25 million, compared with $18 million in 1993.

During the fourth quarter of 1994 the company repurchased 571,700 of its shares and repurchased 1,135,300 shares during the full year.