Max Re Capital Ltd. yesterday reported a nearly 200 percent jump in net income, with earnings of $43 million recorded in the first quarter.

Max Re's strong numbers, for the first three months of 2004, compared to the more paltry $14.6 million in net income earned for the same period a year ago.

Net operating income ? which is net income less minority interest reduced by net realised gains on sale of fixed maturities ? came in at $37.2 million, or 75 cents per share, compared with net operating income of $14.7 million a year prior. Company executives said the first quarter results showed the rewards being reaped after a shift in the type of business written after Max Re moved to offer more traditional re/insurance products following a change in market conditions for the re/insurance sector in 2001.

Although operating costs were higher during the quarter than they were a year ago, the company was still able to see a boost in earnings on the back of strong business conditions.

Max Re CEO Robert Cooney told investments analysts on a quarterly conference call yesterday morning that earned premium levels continued to boost profit levels, alongside "nice growth in business written in the last four or five quarters".

In an earnings statement, Mr. Cooney said: "Our first quarter produced record premiums written largely attributable to strong growth in traditional reinsurance and insurance.

"Our property and casualty business continues to show improved underwriting profits reflecting our change in product mix over the last eighteen months. Our favourable net operating income result this quarter is attributable to profitable traditional reinsurance and insurance underwriting and a return of 4.1 percent on the alternative investment portfolio."

Gross premiums written for the period came in at $439.5 million, which the company said was entirely from property and casualty underwriting, compared to $430.5 million, for the same quarter in 2003. Net investment income for the first quarter also fared well with it increasing to $18.8 million from $14.5 million for the same period in 2003, a result attributed to increased holdings of cash and fixed maturities during the quarter. Total revenue for the three month period also increased 43 percent, year on year, to $263.2 million compared to $184.5 million in 2003.

Growth in revenue for the first quarter was attributed to a 38 percent increase in net premiums earned in comparison to the same period last year, and a 77 percent increase in net gains on alternative investments. On the expense side, Max Re recorded $10.2 million in general and administrative costs for general during the first quarter. That was $2 million more than the money paid out for these same expenses a year ago, but as a percent of net premiums earned fell to 5.1 percent compared to 5.7 percent during that same period in 2003.

On the earnings call with analysts, Mr. Cooney said that one reason costs were higher for this period were different commission structures in the type of business they had been writing. But he said that efficiency ratios for the company were good, and that the company's expense levels were lower than those of rivals.

"Expense wise, Max Re continues to be a lean, focused organisation," he said.