to $108.4 million for the first quarter ended December 31, compared to the same period 1997.

Net income for the quarter was $238.5 million, or $1.21 per share, a 95.2 percent gain over the same period ended December 31, 1997. The fully diluted net asset value per share of the company at December 31 was $20.18.

Investment income played a large part in the company's growth. ACE chairman, president and chief executive officer Brian Duperreault also attributed the company's growth to an ongoing diversification strategy. In the latest move ACE agreed to pay $3.45 billion for the property and casualty businesses of Cigna Corp.

"We have been able to maintain both top and bottom line growth, a tribute to our ongoing diversification strategy, even in a quarter highlighted by significant loss activity in the property catastrophe market and continuing price declines in most sectors of the insurance market,'' he stated in a press release.

ACE's gross premiums written during the quarter increased 22.5 percent to $254.1 million, compared with $207.5 million in the same period the last financial year.

The company wrote net premiums of $154.1 million compared with $153.1 million in the comparable period. Net premiums earned rose 6.2 percent to $218 million.

Net investment income, excluding net realised gains, rose 33.7 percent to $85.1 million. ACE had net realised gains of $130.2 million, a gain of $102.7 million.

ACE noted that the company expected to complete the Cigna transaction by fiscal third quarter.

"One of the keys to maintaining an edge in these competitive markets is the ability to position yourself for the future,'' Mr. Duperreault stated.

National Indemnity, a subsidiary of Berkshire Hathaway, has agreed to put in place $1.25 billion worth of protection against any adverse development in the loss and loss adjustment expense reserves of the run-off operations being acquired as part of the deal.

ACE was referring to Brandywine Holdings Corp. which Cigna formed in 1995 as a runoff operation for asbestos and environmental claims.

ACE has also had losses from asbestos and environmental claims on its books.

The company's reserve for unpaid losses and loss expenses was $3.74 billion as at September 30, 1998. Asbestos claims and claims expenses totaled $144.03 million while environmental claims added up to $104.11 million.

In its recently released annual report ACE reported that in the nine months to September 30, ACE USA paid out $11.2 million for latent claims. When ACE acquired the companies that became ACE USA last year for $338 million, National Indemnity also provided $750 million of reinsurance protection for loss reserves for the 1996 and prior accident years.

ACE has also been paying heavily for breast implant claims. ACE reported that as of September 30 the company had paid out $370 million for breast implant claims from its reserves.

"While the company is unable at this time to determine whether additional reserves, which could have a material adverse effect upon the financial condition, results of operations and cash flows of the company, may be necessary in the future, the company believes that its reserves for unpaid losses and loss expenses including those arising from breast implant claims are adequate as at September 30, 1998,'' ACE stated in the annual report.