Terra Nova (Bermuda) Holdings Ltd. reported increases on several fronts helped push third quarter profit up 56 percent.

The specialty insurer/reinsurer made $14.4 million compared to $9.3 million for the same three months last year. Nine month profit was $49.6 million compared to $35.34 million, an increase of 40 percent. For the quarter, "net income and operating earnings are significantly above the comparable period last year reflecting our expanding business, improved ratings and added capital resources which we have developed over the last year,'' chairman and CEO William Bailey said.

The company also reported premium and investment income increases as well as improved combined and loss ratios. And Terra Nova reported an underwriting profit of $5.4 million in the nine months compared to a $7 million loss.

Terra Nova buoyed by solid third quarter Gains were offset by a higher expenses and realised investment losses.

Terra Nova's third quarter loss experience rose but over the nine months declined, compared to the prior period.

"Each of Terra Nova's operating entities continue to produce both premium and earnings results consistent with our expectations,'' Mr. Bailey added.

He also said that Terra Nova's participation in Lloyd's of London syndicates will lead to 25 percent premium growth in 1996 and 30 to 35 percent in 1997.

"At a time of growing competition, expansion through involvement in the largely renewed business of Octavian syndicates at Lloyd's continues to be the preferred course now that Reconstruction and Renewal has been voted.'' Octavian Syndicate Management Ltd. manages five Lloyd's syndicates in which Terra Nova participates.

In third quarter, Octavian added $201,000 to Terra Nova's profit bringing its nine month impact to $600,000.

After tax operating earnings, which exclude realised investment gains and losses, rose to $15.4 million from $8.5 million. Nine month figures were $42.1 million and $32.7 million.

Net realised investment losses after tax in third quarter were $1 million compared to a $.8 million gain. For nine months, $7.5 million gain compared to $2.7 million gain.

Gross premiums written were $61.2 million compared to $36.5 million. For the nine months, $323.7 million and $264.8 million. Net premiums written were $50.7 million from $32.3 million. Nine month figures, $275.8 million and $223.8 million.

Combined ratio was 95.7 percent compared to 105.5 percent in third quarter and 97.4 percent compared to 103.6 percent for nine months.

The absence of large losses in the current year and stable loss development for prior years improved the loss ratio to 65.2 percent from 74.3 percent a year earlier. This improvement was partly offset by an increase in expense ratio.

Net investment income was $19.8 million for the quarter and $58.7 million for the nine months compared to $17.6 million and $56.4 million.

Quarter losses were $42.2 million compared to $29.5 million. Nine month losses were $137 million and $145.2 million.

Expenses for the three months were $71.4 million compared to $46.6 million while nine month figures were $223 million and $211.2 million.

Assets at September 30 were $1.9 billion compared to $1.8 billion three months earlier.