Four Bermuda insurers and reinsurers last night reported a combined $1.4 billion in profits for the first quarter, signalling a spectacular start to the year for the Island's biggest industry.

Most of the earnings came from the Island's "big two", as Ace Ltd. posted net income of $701 million, while XL Capital Ltd. registered record profits for the period of $549.7 million.

IPC Holdings Ltd. chipped in with $77.2 million net income, while Platinum Underwriters Holdings made a $72.8 million profit.

The Bermuda insurance earnings season got off to a flying start on Monday, when Everest Re declared a 77 percent increase in first-quarter profit.

Although the figures appear to show the boom times are continuing to roll for the Island's insurance market, following last year's combined bumper profit of around $12 billion, there were signs in the numbers of a shrinking reinsurance market, as more ceding insurers retain more of their own risk.

Adding to yesterday's earnings bonanza was Butterfield Bank, whose net income of $35.7 million was a company record for the first three months of the year.