for the year to December 31 jumped 21 percent to $20,807,000, guided by a more than 50 percent increase in total insurance volumes from $103 million to $156 million.

The company paid out $15,100,000 in dividends to its parent, Commercial Risk Partners Ltd. and said such a policy will be continued in the future, providing an income stream while ensuring appropriate capital for the operating company.

Gross premiums written increased year over year from $87.1 million to nearly $121 million. Net investment income was $16.8 million, compared to nearly $17.5 million the year before.

Dedicated to the ART market, the company's management report discussed the continuing and increasing ART competition, with nearly all leading insurance and reinsurance groups providing non-traditional products.

But the report expressed concern at the continuing softening of property and casualty rates.

It said: "One consequence, from our perspective, is that non-traditional products often appear expensive when compared to thinly or underpriced conventional capacity. This conclusion is often drawn from a superficial comparison based on premiums alone, blinding buyers to the real economic value of alternative products.'' The company is working on product development, while concentrating on core US business that includes working layer workers compensation, general liability and automobile liability business, written on a direct and facultative basis.

In international markets, working with SCOR subsidiaries and with brokers, they are more of a writer of treaty reinsurance, with a bias toward short-tail exposures and specialty lines of business.

The company said core casualty business in the US continued to grow. While the number of prospectively written contracts increased by over 50 percent, loss portfolio transfers of self-insured retentions, for both individual corporations and group entities, are becoming increasingly important.

The operational analysis indicates the company's worldwide portfolio was enlarged with a number of new contracts completed in different European markets.

But it warns: "Whilst the general awareness of non-traditional products in Europe is increasing, we are concerned that many of the enquiries we receive are driven by curiosity rather than by strong expressions of interest.

"The business environment is very different from that existing in the United States, with a relatively benign civil justice system which perpetuates the availability of ground up liability coverage. These factors will continue to impede the development of our liability products in the short-term, although we believe the long-term outlook is positive.

"More encouragingly, we are seeing increasing demand for property coverages, a consequence of the increased retentions of corporations and insurers alike.

"Activity in the catastrophe sector, whilst impacted by the softness of the traditional market, continues to be a new source of business.'' Commercial Risk is wholly owned by Commercial Risk Partners Ltd., the principal owners of which are SCOR the international reinsurer from France, SCOR US Corporation and Bermuda domiciled Western General Insurance Ltd.

Total assets at December 31 were $432,040,000, down from $460,384,000 a year before.