Oil Casualty Insurance Ltd. posted net losses for 2001 of just under $19 million - the first losses the company has faced in ten years after poor returns from investments and the worst level of losses the company has faced since 1992.

Oil Casualty Insurance was set up by energy industry companies to insure against disaster and this year the company saw an all-time high in membership after the company tried to broaden and diversify the company's membership base.

Not only did membership grow during 2001, but also gross assets and gross revenues insured went up.

Fourteen new energy companies became new members of Oil Casualty which boosted gross assets by $94.5 billion and gross revenues by $152 billion.

Oil Casualty's total gross assets and gross revenues insured reached a record level of $1.17 trillion and $1.15 trillion respectively.

"This continued growth took place against a backdrop of dramatic global events and difficult trading circumstances and represents the result of a specific strategy to selectively broaden and diversify the membership base, while protecting shareholder equity," the company said.

It added that eight of the 14 new members were either utilities or mining companies following the expansions made by Oil for eligibility in 2001.

Gross premium written increased by 15.2 percent to just under $20.5 million, while gross premiums earned was down to $17.9 million.

The company said in a release yesterday about the $19 million loss: "This was mainly the result of negative investment returns and the highest level of losses since 1992."

Oil Casualty said that two new case reserves had been set up at a total of $125 million.

A release from the company said: "A year like 2001 should not be considered unexpected in view of the nature of the shareholders' business operations and the volatile nature of the financial markets.

"Nevertheless, at a time when the insurance market capacity for energy companies is shrinking, Oil Casualty continues to serve its shareholders in its current capacity commitments of up to $150 million for excess general liability and up to $50 million for excess directors and officers.

The company also pointed out that Oil Casualty has maintained its financial strength rating of "A" from Standard & Poor's which is said reflected strong financial characteristics and a stable outlook.

The company added: "Indeed, as regards claims paying ability, Oil Casualty continues to be able to pay eight $100 million losses or five $150 million losses in any one year."

Oil Casualty also said that although its investment portfolio had experienced a minus one percent return, they said they essentially preserved the value "which was an achievement in the environment of volatile global financial markets".

Roger Paschke, the company's chief financial officer, pointed to the high efficiency of the diversification of the company's investment portfolio which allowed them to achieve a performance "above the strategic benchmarks".

In August Oil Casualty paid out a special dividend of $4.5 million to its shareholders and shareholder equity dropped to $376.4 million from $400 million due primarily to adverse investment results and other operating expenses during the year, the company said.