post a 47 percent increase in second quarter income.

Company chairman and CEO William Bailey said earnings, as well as premium growth, continue to be "satisfactory''.

For the three months ended June 30, the insurer's unaudited net income was $18.6 million compared to $12.7 million for the same quarter a year earlier.

For the half-year, the company has made $35.1 million compared to $26.1 million earlier, an increase of 34 percent.

Quarter gross premiums written were $60.7 million compared to $54.9 million while net premiums written were $52.7 million compared to $50.5 million, increases of 11 percent and four percent respectively.

For the six months ended June 30, the company's gross premiums written were $262.5 million compared to $228.3 million earlier, an increase of 15 percent.

Quarter net premiums earned were down 13 percent at $67.1 million compared to $77 million. Half-year net premiums earned were $142.3 million and $154.7 million, a decrease of eight percent.

Terra Nova underwrites property, casualty, marine and aviation insurance and reinsurance through Terra Nova Insurance Company Ltd. in the UK and Terra Nova (Bermuda) Insurance Company Ltd. Its other subsidiary, Octavian Syndicate Management Ltd., manages five Lloyd's syndicates in which the company participates.

Mr. Bailey said the company backed the Lloyd's of London Reconstruction and Renewal programme.

"This development will enable us to increase our participation in the syndicates managed by Octavian and enhance the benefits to the group from the Octavian acquisition,'' he said.

Mr. Bailey also said the company's recent $124 million initial public offering had enabled its Bermuda company to achieve Class 4 status, for which capital surplus of at least $100 million is required under the Bermuda Insurance Act.

In other quarterly figures, Terra Nova said revenues were $95 million compared to $100.6 million, down six percent, while expenses declined 13 percent to $71.3 million from $82.1 million. Losses and loss adjustment expenses were $42.7 million compared to $57.4 million, a drop of 26 percent.

Half-year revenues were $196.9 million compared to $200 million earlier.

Half-year expenses were $151.6 million and $164.6 million while loss and loss expenses over the first six months of 1996 and 1995 were $94.8 million and $115.7 million respectively.

Net quarter investment income was $20.3 million compared to $21.3 million.

After tax operating earnings, which exclude realised investment gains and losses, were $15.6 million compared to $10.7 million.

Net realised investment gains after tax were $3 million compared to $1 million.

Book value at June 30 was $13.67 compared to $13.60. Combined ratio was 97.2 percent compared to 103.4 percent.

Total assets at June 30 were just under $2 billion compared to $1.8 billion at year end 1995.

Shareholders' equity at June 30 was $352.9 million, up slightly from pro forma amount of $349.5 million.