Bermuda-based Mutual Risk Management Ltd. (MRM) has declared $37,032,000 in net income available to common shareholders for the year to December 31, a near 23 percent improvement over the year to 1995.

Fourth quarter net income increased from $7.4 million to $9.5 million, as operating income rose 26 percent for the period to a record $10 million.

Operating income for the year was $38.5 million, a 24 percent increase over 1995.

Legion Insurance Co. and Legion Indemnity are MRM's policy issuing subsidiaries.

Chairman and CEO Robert Mulderig and president John Kessock said in a joint statement that the positive results were a reflection of continued strong sales of new Legion accounts. A total of 108 new accounts were sold for the year, up 35 percent from 80 the previous year.

They said, "We successfully made the transition during 1996 from corporate risk management to programme business as our fastest growing business segment.

"Legion's renewal rate, which declined during the first half of 1996, recovered well during the second half of 1996 and was 75 percent for the full year. Return on equity continued to meet our expectations at 20 percent for 1996.'' Fee income increased 26 percent for the year to $80.7 million. Pre-tax profit margins were up 40 percent.

Gross premiums written increased 23 percent for the year to $405.9 million and premiums earned were up 17 percent to $56.4 million. The increases were mainly due to the increase in the company's programme business and a decrease in the amount of deductible policies issued, as well as the increase in the overall number of Legion accounts.

Operating expenses rose 33 percent to $48.7 million, due to the inclusion of Professional Underwriters Corp. (PUC) and growth in personnel and other expenses to handle the increased business.

Investment income rose 39 percent $22.5 million, primarily as a result of increased investment assets.

Programme business, the fastest growing business segment, involves replacing traditional insurers as the conduit between producers of specialty books of business and reinsurers wishing to write that business. It grew by 169 percent to $19.6 million, delivering nearly a quarter of the total fee income for the year. The programme business growth was assisted by the acquisition last year of PUC.

Corporate risk management involves providing services to businesses and associations seeking to insure a portion of their risk in a loss sensitive alternative market structure.

This business segment accounted for 61 percent of the year's fee income (1995: 75 percent), but was affected the most by the extremely soft insurance market cycle for commercial risks. Profit margins declined 43 percent.

The company's specialty brokerage business segment provides access to alternative risk transfer insurers and reinsurers in Bermuda and Europe. Fees grew 29 percent for the year.

The company's newest business segment, financial services, is being built on the acquisition of The Hemisphere Group Ltd., which provides administrative services to offshore mutual funds and other companies. Fees grew 40 percent to $6.1 million.

MRM also announced the complete acquisition of The McDonough Insurance Agency, Inc. of Manasquan, New Jersey. It will operate under the Small Business Underwriters (SBU) name, and act as an underwriting manager of workers' compensation insurance programmes for small commercial insured accounts produced by independent agencies.

The major states in which SBU has programmes are Massachusetts, New Jersey and Georgia. It recently commenced programmes for insureds in New York, Pennsylvania, Delaware, Alabama and South Carolina.

Legion Insurance currently acts as a policy-issuing carrier in connection with these programmes.

Mr. Mulderig and Mr. Kessock said, "SBU has developed an innovative technology for underwriting workers' compensation for small commercial accounts. The approach relies heavily on clear underwriting procedures and specialised systems to assist the broker in selling and servicing the product on an efficient basis.''