Profits surged from $19.7 million to $94.1m year on year for Max Capital during the second quarter, the Bermuda company announced yesterday.

Max also announced that its new US-based Max Specialty Insurance Company had written around $10m of gross written premiums during the quarter.

Overall Max Capital's gross written premiums were down just over $40m, but this did not effect the company's profitability, which equated to a huge positive jump of $1.45 per diluted share, up from $0.31 over the same period in 2006.

Max Capital's exposure to losses from the January European windstorm Kyrill, originally estimated to be $5m, are now thought to be significantly lower at about $2m. The company is also reporting relatively minor exposure to the June floods in England, with losses there likely to be less than $5m.

And since the quarter ended, an earthquake in Japan, the Brazilian airline crash and continuing floods in England are at present estimated to create losses for the company of around $9m, according to chairman and chief executive officer W. Marston Becker (pictured).

"Our current estimate is that Max had less than $5m of exposure from the June UK floods and minimal exposure to the Australian windstorms," he said, during a conference call yesterday.

"Since the quarter ended we have also had three other significant industry events, the Japanese earthquake, the Brazilian airline loss and the continued UK floods. We would expect our exposure from these events to be less than $9m in total and we are quite pleased with this performance."

Alternative investments have returned 10.9 percent for the company, compared to four percent over the same period in 2006.

General and administrative expenses increased $10m to $26.8m, mostly as a result of Max's newly launched excess and surplus lines operation Max Specialty.

Mr. Becker said: "Max Specialty commenced underwriting during the quarter, we are off to a very good start and it is growing at a reasonable pace each week. Gross written premiums in the quarter were almost $10m and in July we added another $9m to $10m premium."

The company has reduced the percentage of life and annuity underwriting it does, which amounted to $0.8m out of the total for all gross written premiums for the quarter of $241.5m, which compares with $42.8m out of $284m a year ago.

Reflecting on the second-quarter results as a whole, Mr. Becker said: "Our results for the second quarter continue the strong underwriting performance and solid investment returns for Max.

"Gross premiums written for the quarter remain down compared to 2006, but continue in line with our 2007 expectations. We have continued our underwriting focus on a balanced and diversified strategy.

"During the quarter we commenced underwriting excess and surplus lines in the US through our newly established excess and surplus lines platform, Max Specialty Insurance Company, which underwrites in niche markets. We expect Max Specialty to be an increasingly significant source of profitable growth for Max in the quarters and years ahead."