first quarter net profits yesterday as investment gains offset declines in premium income.

The results came amid fears that increased competition for catastrophe insurance premiums would result in heavy declines in underwriting results.

RenaissanceRe reported net operating income -- excluding investment gains and losses -- slipped from $35.3 million to $34.4 million in the three months to March, 1998.

But the catastrophe insurer reported that per share net operating income rose from $1.51 to $1.52 after the company last year launched a share buyback programme.

Net income rose from $35.4 million to 35.7 million, or from $1,52 to $1.57 per share.

Gross premiums written declined by just $1.2 million to $119,145.

Net premiums earned dropped from $55.9 million in the same period in 1997 to $46.1 million, while net investment income, excluding realised gains and losses, rose from $12.1 million to $13.6 million.

The company reported a gain on investments of $1.2 million, largely as a result of liquidating its equity investments, while it had a loss of $24,000 on foreign exchange dealings, compared to a loss of $1.6 million a year earlier.

The company said it was pleased that it had retained strong premium growth despite declining rates, which had not dropped as far as expected.

Keith Hynes said: "We were pleased gross premiums were almost flat in the first quarter, which shows that we were able to maintain our clients while continuing to practise sound underwriting.'' He said it was difficult to quantify how far premium rates had fallen in the "soft market'', but said the decline had continued from 1997.

Premium rates have been falling for catastrophe insurers as a result of new entries in the reinsurance market and the absence of any serious natural catastrophes such as major hurricanes or earthquakes.

Mr. Hynes said the company was pleased that there had been few claims in the period ($7.8 million compared to $14.2 million in 1997) and said the company's loss ratio had fallen to 17 percent, down from 25 percent in 1997.

But he admitted that prices were also being driven down by the absence of any major claims.

"The catastrophe market is likely to remain soft until there is a catastrophic event,'' he said.

Mr. Hynes said RenaissanceRe liquidated its equity investments shortly after the New Year in the wake of the Asian market meltdown, adding that the company was concerned "about asset side exposure''. But he said the company had maintained its Asian bond investments, which it correctly believed were undervalued.

Overall, he said the company was pleased with the results, noting that on a per share basis income had improved in all areas.

ReinassanceRe shares closed down 38 cents to $49.67 yesterday.

SUMMARY (In Dollars) Net income 35.7 million (1997: 35.4 million) EPS: 1.57 (1.52) Assets 1.05 billion (960 million)