1991 -- an increase of 15 percent on the previous year.

After a year of much activity, the company's assets at the end of 1991 stood at $1.74 billion, a 32 percent increase over the 12 months.

When Centre Re's new subsidiary CentreLine is taken into account, the firm had combined assets of $2.99 billion. The results of CentreLine, which began operating last December, were issued separately to Centre Re's.

CentreLine, which took on the business of Pinnacle Reinsurance, which Centre Re bought during 1991, reported a profit of $266,000 in its first month of trading.

Centre Re provides finite risk insurance, which helps clients to minimise the impact of losses by reducing transaction costs and allows a corporation to provide for losses over a period of years in a stable, budgeted manner.

Centre Re's total liabilities during 1991 rose by 35 percent and stood at $1.38 billion at the end of the year.

The company's premiums rose from $166.2 million to $502.7 million, with total revenues coming to $636.6 million, an increase of 192 percent. Net investment income rose from $50.4 million to $88 million.

Total losses and expenses came to $587.2 million a rise of 232 percent.

Mr. Steven Gluckstern, Centre Re's president and CEO, said that 1991 had been a period of growth, during which the company became owned by the Zurich Insurance group, bought Bermuda-based Pinnacle Re and attracted investment of $50 million from ACE, an excess liability insurance company.

Its purchase of Pinnacle Re, which was the leading writer of time and distance policies for Lloyd's of London syndicates, demonstrated an optimism towards the troubled Lloyd's market that few in the industry share.

Mr. Gluckstern said: "While many changes are likely to take place, one result will certainly be an increased need on the part of syndicates for non-Lloyd's reinsurers.'' Centre Re bought Pinnacle to capitalise on this opportunity, he added.

Mr. Gluckstern revealed that Centre Re had already had its fingers burnt once in the Lloyd's market when, in mid-1989, it wrote a three-year reinsurance contract protecting the estates of Lloyd's Names who die during a given underwriting year.

Centre Re considered that the likelihood of the underwriting years 1988, 1989 and 1990 all being market-wide losses was extremely unlikely, particularly since there had only been one significant market-wide loss -- less than $40 million -- in the previous half century.

Yet, market-wide losses in excess of $500 million occurred in each of the three years of the programme.

"Unfortunately for us, and the surviving Names at Lloyd's, our assessment was incorrect,'' said Mr. Gluckstern.

"Despite limiting our liability and charging a significant premium for coverage, we will lose a substantial amount of money on this contract, which has been fully reflected in our loss and loss adjustment expenses this year.'' The total reinsurance volume for 1991 fell from $617 million the year before to $527 million, as expected, said Mr. Gluckstern.

"Although aggregate reinsurance volume declined last year, revenues from prospective reinsurance increased dramatically from $182 million in 1990 to $464 million in 1991,'' he added.

"We believe this reflects the growing trend of using finite risk products to control risk exposure for unknown or unforeseen events, and not merely to protect against historic exposures.'' Mr. Gluckstern said that the boundaries of reinsurance were still being defined.

"Since the inception of Centre Re in 1988, we've demonstrated that belief by positioning ourselves beyond the limits of traditional reinsurance through the introduction and marketing of finite risk reinsurance,'' he said.

"In 1991, this core business continued to flourish, bringing us new clients and a more central role in the marketplace.

"Now we're looking beyond again -- even beyond reinsurance itself -- to efficient new structures of insurance and finance designed to help corporations improve their risk management and financial planning.

"To achieve this goal and command greater presence in all of our markets, we had to grow. The challenge, naturally, was how to do so without losing the creativity or entrepreneurial drive that got us here. We addressed this challenge in 1991 in a number of ways, including new investors, new investments and new strategic alliances.'' He added: "Our strategy for the future is to maintain a relatively small headquarters and staff, allowing us to focus on what we do best: creating new product structures and analysing financial opportunities for our clients.

"Rather than developing layers of internal bureaucracy, we have looked for existing companies that can enhance our ability to write effective risk management products.'' Centre Re 1991 Summary Profit $48.2m Assets $1.74b Liabilities $1.38b Shareholders' equity $360.3m Premiums $502.7m Losses and expenses $587.2m Centreline 1991 Summary Profit $266,000 Assets $1.25b Liabilities $1.2b