quarter results that includes an operating profit of $11.9 million, a significant improvement on the $3.1 million in the first quarter of 1994.

Total written premium of $53.6 million was up 15.5 percent on last year's first quarter of $46.4 million. Earned premium rose 39.4 percent from $16.7 million during last year's first quarter to $23.3 million for the first three months of this fiscal year.

Net investment income rose 34.3 percent to $5 million from $3.7 million. The majority of the company's assets are bonds, 77 percent of which have a triple A credit rating, a letter to shareholders advised. The portfolio average life is 3.2 years with an average yield of 5.7 percent.

Total assets at the end of the quarter were $445.4 million, an increase of 24.6 percent from a year ago. Shareholders equity at the end of the first quarter was $362.6 million, an increase of 19.6 percent over the same period last year.

The company improved its combined ratio to 74.1 percent, from last year's 94.1 percent. Incurred claims were $13.9 million compared to last year's first quarter of $13.5 million.

The shareholders letter was signed by chairman Mr. Joseph Johnson and president and CEO Mr. John Dowling.

It stated: "The major renewal season of the year, that is for business (starting) on January 1, 1995 was, in general, a disciplined season.

"Rates prior to the season were at, or near, historic high levels. Overall rates softened from these historic highs by about 10 percent. In the USA, those accounts that had suffered major claims, paid an increase in rates.

Elsewhere, rates for smaller midwestern insurers showed rate reductions of about 15 percent.

"In the UK, rates came down about 15 percent and insurance companies generally increased their retentions. They also bought more high level cover which attracts a lower level of rate. In Europe we saw rates relatively firm.'' IPC Re hold a reserve of $5 million for the Kobe earthquake, but they have not been advised of any claims yet.

"We also incurred a major risk loss, where our reserve is $8.8 million, part of a gross claim of $230 million. The reserves for losses incurred in 1994 of $31.6 million remain unaltered,'' the letter said.

The firm continued during the quarter to develop its client portfolio, and completed April 1 renewals three weeks into the month. Most of that business is in Japan and the Far East. The firm describes its portfolio of property catastrophe business as modest.

The senior officers added: "Despite the Kobe earthquake we saw some softening of rates in this area and therefore did not seek to grow our portfolio. We have developed, however, a useful portfolio of marine reinsurance in this region.'' IPC Re was formed by the American International Group (AIG) two years ago June to specialise in the provision of property catastrophe treaty reinsurance worldwide, including personal and commercial lines, on an excess of loss basis.

AIG holds 24.4 percent of the equity of the company, with the remainder held by a small number of investors.