in first quarter 1998, a gain of 41 percent over first quarter 1997.

Diluted net income per share increased by 18 percent to 40 cents for the first three months of 1998, compared to 34 cents per share in 1997.

Through its subsidiaries Stirling provides risk management services and offers alternatives to traditional workers' compensation insurance primarily to small and mid-sized US companies.

The company reported risk management fee income increased 24 percent to $12.8 million for the quarter compared to the same period 1997. "The company experienced strong growth in managing general agency fees which increased $1.2 million in the first three months of 1998, to $3.7 million, from $2.5 million in 1997 reflecting the continued expansion of the company's managing general agency network in the Southeastern United States,'' company chairman, president and chief executive officer Mark Cooke stated in a press release.

Brokerage operations fee income increased by $800,000 to $6.1 million compared to first quarter 1997. Realm National Insurance Co. Ltd., which Stirling bought in 1996, earned policy issuance fees of $400,000 in the first quarter, double the amount earned in first quarter 1997.

Net investment income increased to $2 million, a gain of 62 percent over first quarter 1997.

Net premiums earned was $4.5 million, a gain of 67 percent over first quarter 1997.

Stirling records big gain "This increase was due to significant growth in workers' compensation business being written by Realm National during the first three months of 1998,'' Mr. Cooke stated. Overall total revenues increased by 39 percent to $19.9 million, while expenses increased 40 percent to $15.1 million for first quarter 1998 compared to first quarter 1997.

Mr. Cooke said $2.6 million of the increase was due to increased insurance costs. "This increase was partly due to the corresponding $1.8 million increase in net premiums earned and partly due to adverse loss development on one particular programme that covers bodily injury and property risks in the construction industry,'' he stated. Total expenses excluding insurance costs increased 21 percent to $9.7 million for the first quarter, a reflection of the general expansion of the company as reflected by revenue growth.

Gross premiums written and assumed in first quarter increased 202 percent to $18.4 million, due to growth by Realm National. The subsidiary wrote gross premiums of $13.6 million in first quarter 1998, compared to $2.8 million written in first quarter 1997.