Despite a soft casualty market, Bermuda-based specialty lines underwriter Sphere Drake Underwriting Management (Bermuda) Ltd. (SDUMBL) still recorded a more than 35 percent increase in net premiums written for the three months ending June 30, when compared with the same period last year.

The second quarter results show the ART (alternative risk transfer) business from the Bermuda office grew from 1994's second quarter results of $16,731,000 to $22,655,000 for this year's second quarter.

The improvement means that the ART programme accounted for 18.2 percent of Sphere Drake Holdings Ltd.'s writings of $124,707,000 for the period this year, as opposed to 11 percent in the same period last year.

"Considering the softness in the market, the results were satisfying,'' commented SDUMBL president, Mr. Jonathan Crawley.

Sphere Drake Holdings Ltd.'s business consists of a wide range of marine and aviation and non-marine insurance and reinsurance risks worldwide, and alternative risk transfer business, with an emphasis on US-based clients.

Net premiums written rose from $29,096,000 for the first six months of 1994 to $33,502,000 for the first six months of this year.

Loss and loss adjustment expense ratios were 61.1 percent for the three month period and 62.5 percent for the six month period.

Sphere Drake Holdings Ltd. reported overall second quarter net income had increased to $17.1 million, or $0.93 per share, from $9.6 million, or $0.52 per share, for the same period in 1994.

For the first six months, net income totaled $26.7 million, or $1.45 per share, from $18.2 million, $0.99 per share for the same period during 1994.

Operating income totaled $10.4 million ($0.56 per share) for the second quarter, excluding realised investment gains /losses, compared against $11.2 million ($0.61 a share) for the same period in 1994. The six month figures were $19.4 million ($1.06 per share) in 1994 and $20.1 million ($1.09 per share) in 1995.

The GAAP combined ratios for the second quarter and six months of 1995 were 99.8 percent and 100.5 percent respectively. These compare with 95.8 percent and 96.3 percent for the same periods last year.

Mr. Ian H. Dean, president and CEO of Sphere Drake Holdings Ltd. said, "The 1995 half year results demonstrate a satisfactory performance on the business written. At the beginning of the year we anticipated a reduced rate of growth than that achieved in 1994, because of softer market conditions in certain classes of businesses, most particularly the reinsurance lines. The current rate of growth is consistent with our strategy to only write business were we perceive opportunities exist for adequate profitability. We will not compromise our standards simply to achieve increased premium volume.

"During the second quarter the company has strengthened reserves, consistent with its prudent reserving policy. To date, 1995 has shown a favourable loss experience on the catastrophe accounts which has contributed to our profits in the first six months of the year.'' Total revenues excluding realised investment gains /losses, for the second quarter and first six months of 1995 were $141.1 million, up 3.8 percent, and $269.1 million, up 19.1 percent, respectively, over revenues for the prior year's periods.

Net investment income increased by 50.6 percent to $13.1 million in the second quarter of 1995 from $8.7 million in 1994. This was primarily due to an increase of 23.9 percent in average invested assets to $721 million, resulting primarily from positive cash flow from operations, and to an increase in average investment yield to 7.3 percent from 6.0 percent in the second quarter of 1994, reflecting higher interest rates in the investment portfolio.

For the six months ended June 30, 1995, net investment income increased 48.2 percent to $24.6 million, compared with $16.6 million in the same period in 1994, due to an increase in average invested assets of 19.8 percent to $707 million and an increase in average investment yield to seven percent in 1995 from 5.6 percent in 1994.

Book value per share increased to $16.03 at June 30, 1995 from $14.73 at the end of the first quarter and $13.81 at December 31, 1994. This is due to increased income from operations and appreciation of the company's investment portfolio.

Sphere Drake Holdings Ltd. directors have declared a dividend of $0.04 a share, to be paid on August 29 to all shareholders of record at the close of business August 15.