Taking advantage of the turmoil caused in the credit market by instability in the US sub-prime mortgage arena, and higher reinsurance premiums through a shift to "upfront premiums" have contributed to a 47 percent increase in the total income of Security Capital Assurance in the first three months of 2007.

The rise, driven by growth in premiums and investment income, has given the Bermuda-domiciled holding company a $37.3 million net income for the first quarter of the 2007, or 58 cents per share, compared to $16.7m (36 cents per share) for the same period in 2006.

And the company president has spoken of his belief that SCA is poised to take advantage of any further volatility in the credit market, as it did with regard to US sub-prime mortgages during the past few months.

Operating costs for the first quarter were $44.1m compared to $26.3m last year.

SCA president and chief executive officer Paul Giordano said: "I am pleased with the solid operating results that we posted this quarter as we continue to build upon the momentum that we developed in 2006.

"New business production was healthy amid turbulence in certain sectors of the credit market, with opportunities in US structured finance and international business leading the way for us. We are well positioned to take advantage of credit market volatility when it arises, as it did with respect to the US sub-prime mortgages this quarter, while maintaining underwriting and pricing discipline."

The total gross premiums written were $105m compared to $82.2m in the same quarter of 2006. The company said its increased premiums were primarily driven by a $10.4m increase written from transactions by SCA's power and utility team and a $4.1m increase in premiums in the reinsurance segment due to a shift in business mix towards "upfront premiums".

Net premiums earned increased 23 percent to $46.4m and was due to "growth of in-force policies along with a reduction in ceded premiums to XL Insurance (Bermuda) Limited as part of SCA's initial public offering".