Oil Insurance Ltd. turned a profit of $420 million in the 2003 financial year, after suffering a loss of $210 million the previous year.

OIL, which is a mutual insurance company which covers companies in the energy industry, said the profit came as a result of strong underwriting and investment performances.

Prior to general and administrative expenses, underwriting income was $78 million, compared to a loss of $94 million in 2002.

Investment income was $353 million compared to a loss of $100 million in 2002.

Company chairman Jack Wesley said the company?s shareholders ?had reason to be pleased with the performance of their company?.

?During a period of instability on the commercial markets, the value of a large block of stable capacity, year in, year out, cannot be underestimated.

?For many of our members, their OIL entry forms the cornerstone of their overall lnsurance programme.?

Ten new shareholders had joined the company in the past year, bringing the total membership to 81.

Although seven companies had left the firm, its current membership comprises $1.8 trillion of energy businesses around the world.

OIL also raised some $800 million in debentures and notes during the year to strengthen the company?s balance sheet and to ensure that its claims-paying ability was secure in spite of two years of poor results in 2001 and 2002.

Part of the reason for the company?s success in 2003 was a lower level of losses than expected by members, chief operating officer Charles Kline said.

Losses reported by members in 2003 totalled $177 million, while adjustments and new losses from earlier years brought the total claims to $313 million, compared to 274.5 million in 2002.

Chief financial officer Roger Paschke said the company?s overall return for 2003 was 18.5 percent and that its diversified portfolio had provided the company with protection in down markets.