LaSalle Re Holdings Limited yesterday posted a dismal second-quarter net loss of $10.33 million, well down on its $17.73 million profit for the quarter last year.

But president, chairman and CEO Victor Blake told The Royal Gazette last night the "disappointing'' results were merely "symptomatic of difficult market conditions''.

He stressed the results were only for a quarter and should not be "distorted'' to represent more than that.

And he hoped results later in the year would be more positive although he admitted the recent tornadoes in Oklahoma and Kansas would impact on the bottom line.

But he declined to get specific, saying only they would affect all catastrophe writers to varying degrees.

The company writes specialist classes of reinsurance on a worldwide bases with an emphasis on property catastrophe reinsurance through its operating company LaSalle Re Limited.

Yesterday's results show the company paid out $50.2 million in losses during the quarter, or 131.9 percent of net premiums earned, more than double than the $19.9 million in 1998's second quarter.

Mr. Blake said during the quarter the company strengthened both case reserves and reserves for incurred but not reported losses, by $35 million which resulted in a charge to earnings of approximately $1.73 per share.

"Our financial results reflect the fact that our industry is over-capitalised at the moment, fuelling indiscriminate competition.'' "Our overall book experienced a reduction of 6.3 percent in gross premiums written. In our experience, rates for business written in the quarter were about five to ten percent below rates written a year earlier.'' He said as well as strengthening reserves LaSalle had also moved to implement two strategic initiatives which would reduce volatility and enhancing the strength of the company.

And these two initiatives mean LaSalle has scrapped its plans announced in March to raise $50 million from an offering of two million preferred shares which would have raised its capital to $570 million.

The first is the quota share reinsurance arrangement the company has negotiated with Chicago-based insurer CNA.

And the second is the company's new dividend policy of keeping its 37.5 cents per share quarterly dividend until September after which the formula-driven dividend will change to one determined by the board of directors.

"We believe these developments provide a substantial platform upon which LaSalle can continue to build its operations. We now offer even greater security to our clients.

"These initiatives will enable the company to grow its capital over the next several years, in response to business opportunities.'' The loss before minority interest, including net realised losses on investments for the quarter was $13.7 million, compared with income before minority interest of $22 million for the same period last year. Gross premiums written for the quarter were down from $94.6 million to $88.6 million, while net premiums also dropped from $41.9 million a year ago to $38.1 million this quarter.

HURRICANES HUR