its first quarter despite losses recorded in the Kobe earthquake and "an unprecedented sequence'' of aviation losses incurred in 1994.

The Bermuda-based company said earnings per share rose from 47 cents to 52 cents in the three months to March 31 on revenues of $127.7 million, up 41 percent or $37.2 million from a year ago.

"I am pleased to report solid growth in earning in the first quarter of 1995.

New business volumes were up broadly as we anticipated and the substantial increase in net premiums earned reflects 1994's growth,'' said Mr. Ian Dean, president and CEO.

First quarter combined ratio was 101.4 percent compared to 97.2 percent a year earlier. In 1995, 4.3 percent of the combined ratio resulted from losses associated with the Kobe earthquake.

"It remains extremely difficult to accurately assess the impact of this loss as the company has received little information of claims to date,'' the company said. "In view of this uncertainty, it is prudent to make provisions for losses and the company has booked $5 million before tax or 23 cents per share after tax in first quarter.'' The combined ratio was also affected by late notification of losses on the company's aviation reinsurance account arising from the unprecedented sequence of losses occurring last year.

Operating income, excluding realised investment losses/gains, rose 18.9 percent to $9.8 million, or 53 cents per share, for first quarter compared to $8.2 million or 45 cents per share a year ago.

Net investment income increased 45.6 percent to $11.5 million compared to $7.9 million a year earlier. The increase was attributed to an 18.5 percent increase in average invested assets from $582.9 million in first quarter 1994 to $691.0 million in first quarter 1995. and an increase in average investment yield from 5.4 percent to 6.7 percent.

The board of directors declared a dividend of four cents per share.

Sphere Drake Holdings underwrites international property and casualty insurance and reinsurance and ART business through its subsidiaries in Bermuda and London.