healthy $44.4 million net income turnaround.

For the 12 months ended December 31, 1996 the insurer made $26.5 million, or $1.44 per share, compared to a loss of $17.9 million, or 97 cents per share, for the prior 12 months.

The turnaround is after restructuring costs in fourth quarter of $8.6 million before tax ($5.9 million after tax). Further before tax costs up to $7 million are anticipated.

And although Sphere Drake was in the red $385,000, or two cents per share, in fourth quarter, results are much improved over last year's final frame when the company posted a $49.9 million, or $2.71 per share, loss.

"We have delivered earnings in line with our expectations despite tough market conditions, and we have delivered an attractive return to our shareholders after providing appropriately for restructuring costs in the fourth quarter,'' Sphere Drake president and CEO Michael Watson said.

"Our return to profitability last year undoubtedly owes much to the further excellent results from our property catastrophe business.'' In November, Sphere Drake announced it would refocus underwriting on reinsurance and specialty insurance lines and discontinue all marine business while in third quarter the company announced it would withdraw from financial institutions and professional indemnity insurance.

"I believe that our new strategy will provide us with a viable platform for future success, however, in the short term, excess capacity, the competitive rating environment, and the completion of restructuring of the company will result in lower earnings in 1997.'' Sphere Drake's year operating income from continuing operations, excluding net realised investment gains/losses, net of tax, was $36 million compared to an operating loss of $19.8 million.

Fourth quarter operating income from continuing operations, excluding realised investment gains/losses, net of tax, was $8.6 million, or 47 cents per share, compared to an operating loss of $52.2 million, or $2.83 per share.

Year expenses were $351.1 million compared to $426.9 million. Quarter figures were $93.6 million and $162.1 million respectively.

Year losses and loss expenses were $225.3 million compared to $299 million.

Quarter figures were $61.8 million and $122.5 million.

Losses from discontinued operations of $10.8 million for the quarter and $14.2 million for the year encompass all marine insurance lines from which Sphere Drake withdrew as part of restructuring.

Net premiums written from continuing operations totalled $288.6 million in 1996 compared to $367.2 million in 1995.

"The reduction reflects Sphere Drake's determination to emphasise profitability rather than volume in 1996 as well as the continuing decline in market rates and the fierce competitive environment,'' Sphere Drake said.

Net premiums written from continuing operations rose to $67 million in fourth quarter compared to $64.9 million in fourth quarter 1995.