CastlePoint Holdings made a $10.5 million profit in the second quarter of the year, compared to a $1.1m loss over the same period last year.

Much of its improved performance is being put down to its risk sharing and program business and the growth of its largest client Tower.

The three-month profit equates to $0.27 per diluted share.

CastlePoint's profit for the year to date now stands at $17.6m.

Chief executive officer Michael H. Lee, said: "Our strong second quarter operating results reflect continued profitable growth from Tower, our largest client, as well as continued growth from clients other than Tower.

"We are especially pleased with the favorable trends that we are seeing from our risk sharing and program business.

"Because our business solutions are unique and customized to meet the needs of our clients, we believe we are well positioned to take advantage of current market opportunities."

Net earned premiums increased 169.5 percent to $54.9m in the second quarter compared to $20.4m for the same period in 2006. Net premiums earned represented 68.2 percent of net premiums written for the three months ended June 30 compared to 28 percent for the same period in 2006.

Net investment income increased by 178.4% to $8.1 million for the three months compared to $2.9 million for the same period in 2006.

The company's reinsurance subsidiary CastlePoint Re assumed 40 percent of Tower's brokerage business during the past quarter.

CastlePoint Holdings is projecting third quarter profits between $10m and $12m.