Bermuda-based Scottish Annuity & Life Holdings, Ltd. is set to change its name to Scottish Re in an attempt to "re-brand' after reporting a marginal increase in profits for the second quarter of 2003.

Profits, or net income for the quarter, which including the results of a sell-off of wealth management operations in Luxembourg, only rose by $0.1 million to $7.9 million, or $0.28 per diluted share from $7.8 million or $0.28 per diluted share for the prior year period.

"We recently filed a proxy statement with the Securities and Exchange Commission seeking shareholder approval to change our parent company name to Scottish Re Group Limited," said Scott Willkomm, president of Scottish Annuity & Life.

"Our intention in changing the company's name is to re-brand our business under the Scottish Re banner, which more accurately reflects our core franchise by emphasising our life reinsurance business and providing a strong and consistent identity for all of our operating units."

The company announced it was moving to Bermuda in 2001, and has been moving away from its annuity business towards life reinsurance for the past two years.

Despite the marginal profits, the company reported its net operating earnings increased by 42 percent during the second quarter of 2003 to $12.5 million after focusing on core business.

This compares to net operating earnings of $8.8 million for the same period a year earlier.

Net operating earnings is calculated by adjusting GAAP income from continuing operations by net realised capital gains and losses as adjusted for the related effects upon the amortisation of deferred acquisition costs and taxes.

"This quarter's successful results continue to reflect the high quality fundamental characteristics of our business model," said Michael C. French, chairman and chief executive officer of Scottish Annuity & Life.

"As we complete the first half of this year, we are well into another year devoted to building the company's earnings power and franchise value."

The company said as part of a strategy of focusing on its core life reinsurance business and streamlining its wealth management business, the company elected to discontinue its wealth management operations in Luxembourg during the second quarter.

The results of this subsidiary are reported as discontinued operations.

The loss from discontinued operations amounted to $1.4 million and $1.6 million for the quarter and year to date, respectively. "In July we completed a successful offer of ordinary shares to the public," Mr. French added.

"We were overwhelmed by the positive response from investors and the significant demand for shares, which led us to increase the size of the offering by one million shares.

"In addition to significantly enhancing our capital base, the offering broadened our shareholder base and has improved the liquidity of our shares."

Total revenue for the quarter increased to $129.7 million from $64.4 million for the prior year period, an increase of 101 percent.

Total benefits and expenses increased to $120.4 million for the quarter from $56.3 million, an increase of 114 percent.

The increases were principally driven by the growth in the company's reinsurance business both in North America and in its international operations.

Scottish Annuity's total assets were reported at $3.8 billion as of June 30, 2003.

The core investment portfolio, comprising fixed maturity investments, preferred stock and most of the cash and cash equivalents, totalled $1.5 billion, and had an average quality rating of "A+", an effective duration of 3.5 years and a weighted average book yield of 4.9 percent.

This compares with a portfolio balance of $1.1 billion, an average quality rating of "AA-", effective duration of 3.0 years and an average book yield of 4.9 percent as of December 31, 2002.

As of June 30, 2003, the company had approximately $90.4 billion of life reinsurance in force covering 1,787,000 lives with an average benefit per life of $51,000 in our North American operations.

As of December 31, 2002, the company had approximately $68.0 billion of life reinsurance in force covering 1,387,000 lives.