Axis on Monday night reported its net income has soared by 56 percent to $166.8 million for the first quarter of 2004 after a strong underwriting performance during the renewals season and increased investment income.

The company, which was one of six large insurance companies to set up in Bermuda in the wake of the shortage of capacity following the September 11 attacks, reported a year ago that it made profits of $107.1 million for the same period.

"This first quarter of 2004 saw all four of our underwriting segments fully operational for the first time," said John Charman, president and chief executive officer of Axis. "Our diversified, global Axis franchise was able to participate strongly in the important renewal season and all segments reported substantial growth ranging from 23 percent to 170 percent."

Mr. Charman said that the group of specialty business written was both geographically and product diversified which traded daily as "a highly efficient and focused, integrated underwriting machine", generating an annualised return on average equity of 22.9 percent, compared to 21.2 percent a year earlier.

Mr. Charman added: "Our diversity of operations, our strong balance sheet, our highly skilled and well regarded underwriting

Net income (excluding net realised gains and losses on investments, net of tax) for the quarter ended March 31, 2004 was $157.6 million, compared with $96.0 million for the quarter ended March 31, 2003.

Gross premiums written for the quarter ended March 31, 2004 were $1,044.1 million compared to $608.6 million for the quarter ended March 31, 2003, an increase of 72 percent.

Of these premiums written the company said that $300.4 million were derived from global insurance compared to $243.6 million in the corresponding quarter of 2003 up 23 percent.

And $429.1 million came from global reinsurance compared to $211.5 million in the corresponding quarter of 2003, an increase of 103 percent, the second highest sector increase for the company.

Axis also said $148.3 million came from US insurance compared to $91.9 million in the corresponding quarter of 2003, an increase of 61 percent.

But the highest increase by segment for Axis was from US reinsurance which made $166.3 million compared to $61.6 million the corresponding quarter of 2003, an increase of 170 percent.

"The increase in our global reinsurance gross premiums written was largely driven by our strategic expansion into continental Europe," said a statement from the company. "The increase in our US insurance and reinsurance gross premiums written was largely driven by greater market penetration and our ability to participate fully in the first quarter's important renewal season."

For the quarter ended March 31, 2004 compared to the quarter ended March 31, 2003, ceded premiums increased to $144.9 million from $68.4 million and net premiums written rose to $899.2 million from $540.1 million.

Net premiums earned increased to $471.2 million from $302.4 million with the increase reflecting the increase in Axis' gross premiums written over the last twelve months.

For the quarter ended March 31, 2004, net investment income was $31.3 million and realised gains were $10.1 million, compared with $11.4 million in net investment income and $11.2 million in realised gains for the quarter ended March 31, 2003 with the increase in net investment income due to increased invested assets on which Axis obtained improved investment yields.

Cash flow generated from operations was $365.5 million compared with $264.4 million for the quarter ended March 31, 2004.

Quarters ended March 31, 2004 - 2003

Revenues

Gross premiums written $1,044,123,000 - $608,587,000

Premiums ceded ($144,933,000) - ($68,443,000)

Change in unearned premiums ($427,942,000) - ($237,717,000)

Net premiums earned $471,248,000 - $302,427,000

Net investment income $31,259,000 - $11,352,000

Net realised gains $10,097,000 - $11,198,000

Other insurance related income $288,000 - $1,106,000

Total revenues $512,892,000 $326,083,000

Expenses

Net losses and loss expenses $242,600,000 - $146,335,000

Acquisition costs $56,963,000 - $44,251,000

General and administrative expenses $41,888,000 - $30,362,000

Foreign exchange $1,145,000 - ($1,887,000)

Total expenses $342,596,000 - $219,061,000

Income before income taxes $170,296,000 - $107,022,000

Income tax (expense) recovery ($3,510,000) - $97,000

Net Income $166,786,000 - $107,119,000