Newly-restructured Bermuda-based Oil Casualty Insurance Limited (OCIL) has reported that it ended fiscal 1999 with more than $390 million in shareholders' equity.

The almost $35 million jump in equity followed the recent reorganisation of the energy industry insurance provider which included a stock repurchase payment to shareholders of $137 million.

OCIL President and Chief Executive Officer Jon King said: "I am happy to report that we have made a successful transition to the new reconstituted, more mutual OCIL.

"All phases of the plan have been fully implemented. As of this point in time, OCIL has 58 shareholder/policyholders.'' OCIL's 1999 risk profile was the best since 1993 and this reflected recent trends in the company's membership and their insurance programmes.

Premiums earned for the year totalled about $19 million, and premiums ceded to reinsurers were just over $10 million.

Senior Vice President and Chief Financial Officer Roger Pascke said: "Favourable financial results and strong protection of capital afforded by OCIL's reinsurance programme have positioned the company well for the future in servicing the needs of its members.'' Mr. King added: "Net income for the year was $34.8 million, despite booking two new case loss reserves totalling $24 million. Earnings were due to a stellar investment portfolio performance.'' The first loss reserve arose from liabilities following an explosion and fire at a Texas butane pipeline in 1996.

The second was posted in respect to an Ohio chemical plant loss in 1993.

Said Mr. King: "The OCIL portfolio achieved a 12.1 percent return for investment income of $45.4 million. This marks the fifth straight year in a row of double-digit returns.

"We ended the year with capital and surplus of $390.4 million. That is an increase of 9.9 percent after adjusting last year's ending capital for the cost of the 1998 reorganisation.'' OCIL senior vice president and chief operating officer Jack Wesley said: "The year was a tough, challenging one for OCIL, as it was for both the overall insurance and energy industry.

"At the beginning of the year, the energy industry was faced with ten-year low crude oil prices and squeezed margins. At the same time, the insurance industry was in its fifth year of retreating premium rates, below generally accepted burning costs, and capacity reached record levels.

"As the year ended,'' he continued, "crude prices had substantially recovered to a decade high. Unfortunately, insurance rates and capacity remained virtually unchanged.

"Business merger and acquisition activities in the energy industry reached record levels in 1998 and 1999 causing the consolidation of some memberships and insurance policies,'' added Mr. Wesley.

"However, in terms of gross assets insured and gross revenues insured, the company saw only a slight decrease of about five percent -- from $958 billion to $912 billion -- and six percent -- from $909 billion to $851 billion -- respectively.''