CastlePoint saw its net income jump 35 percent during the 2008 first quarter.

The compay had a net income of $9.56 million compared to $7.07 million during the same period in 2007.

Operating income increased by 56 percent while CastlePoint's combined ratio, covering both the isnurance and reinsurance segments, was 90.6 percent for the first quarter.

However, net investment income declined by 11 percent to $5.2 million in 2008 compared to $5.8 million for the same period in 2007.

Net investment income included a $3 million loss in a limited partnership that invests primarily in tax-free bonds. The company said the partnership manager is in the process of liquidating this partnership, and it should be off the books by the end of June.

Michael Lee, chief executive officer of CastlePoint Holdings Ltd. said: "We are extremely pleased with our operating results for the first quarter, due to our strong growth combined with excellent underwriting results.

"We are continuing to see strong demand for our products due to our unique approach to the business, especially from clients other than Tower.

"While the investment loss was a distraction to our strong operating results, we believe we have a very high quality investment portfolio and do not believe it will affect our results in 2008 in a meaningful way."

For the second quarter of 2008, the company projected net income would be in a range between $13.5 million and $15.8 million, and diluted earnings per share to be in a range between $0.35 and $0.41 per share.