had net income of $106 million for the year ended December 31, 1997.

The company's balance sheet was part of a statement filed with the US Securities and Exchange Commission by Bermuda-based ACE Ltd., which last week announced an agreement to purchase the company for $711 million.

Overall, net premiums remained the same in 1997 compared to 1996, while net income rose about 25 percent. Total revenue fell in 1997 by about $5 million to $161 million.

The gain in net income came from a reduction in the reserve for losses, loss expenses and experience refunds, which fell by 55 percent to about $26 million in 1997.

At year end total shareholders' equity had increased 28 percent to $540 million. CAT also spent about $73 million for a 60 percent interest in Enterprise Reinsurance Holdings Corp., a company founded in 1997 to develop alternative reinsurance products and markets.

As part of the purchase agreement, CAT's ownership in Enterprise will be distributed to the company's current shareholders. Bermuda-based CAT was founded in 1993 by a group of investors led by Morgan Stanley Capital Partners, part of Morgan Stanley Dean Witter.

The company was formed to specialise in excess-of-loss property catastrophe reinsurance and currently has about 160 customer accounts. The company has also developed proprietary software and loss-modelling tools.

After adjusting for the distribution of CAT's investment in Enterprise, the company's net book value was about $474 million. ACE had $2.6 billion in shareholders equity, and about $5 billion in assets.