operational earnings for fiscal 1994's second quarter of $34.8 million, excluding net realised losses.

The quarter, ending March 31, had a 19 percent increase over the $29.3 million reported for the same period last year. But adverse movements in the securities markets during the quarter resulted in net realised losses that scaled back net income to $17.8 million ($0.37 a share), which is down from the $64.3 million ($1.71 per share) reported for the same period in fiscal 1993.

Net income had jumped to $114.9 million ($2.35 per share) in six months to March 31, when compared a year earlier to $103.3 million ($2.74 per share).

Fully diluted net asset value per share at the end of the last quarter was $27.34.

Excluding net realised losses, earnings per share of $0.72 for the second quarter of this year, and earnings per share, excluding net realised gains of $1.39 for the first six months of this year would be compared to pro forma earnings per share, excluding the net realised gains, of $0.59 for the second quarter in 1993 and $1.21 for the first six months of 1993.

Pro forma calculations assume the share recapitalisation and repurchase which occurred in March last year, had actually occurred at the beginning of that fiscal year. Net earnings per share of $0.37 for the second quarter of 1994 and $2.35 for the first six months of fiscal 1994 would be compared to pro forma net earnings per share of $1.29 for the second quarter and $2.07 for the first half of 1993.

Last November, ACE completed the acquisition of Corporate Officers and Directors Assurance Holding Ltd. (CODA). Since that date, CODA's earnings have been included in ACE's consolidated fiscal 1994 results.

ACE chairman, president and CEO Mr. Walter A. Scott noted "ACE's operations continued to grow during the second quarter.'' The company expanded its product offerings in February, with the addition of satellite insurance, writ ing dedicated coverage of up to $25 million per launch.

"We are proceeding aggressively with our plan to enhance shareholder value, through increased utilisation of our capital,'' Mr. Scott said.

"Customer response to our entry into the satellite market has exceeded our expectations, as witnessed by the high volume of submissions. This response confirms that there is a significant demand for the kind of capacity and stability which ACE brings to all the markets in which we participate,'' he said.

With the acquisition of CODA, together with selective excess liability price increases and new account growth, net premiums written during the second quarter were up to $93.6 million, when compared to the $77.9 million for the same period last year.

Net premiums earned shot up by 23 per cent to $95.3 million, from $77.6 million from the corresponding period in 1993.

Six month comparisons show net premiums written at $189.4 million over $171.1 million for the six month period last year. Net premiums earned grew from $154.9 million last year in the six month period to $188.2 million this year.

Net investment income, excluding realised gains and losses, was $33.6 million for the second quarter, up from $29.00 million for the same period last year.

Total investments and cash amounted to $2.4 billion as of March 31.

Total return on the actively managed investment portfolio was a negative 2.62 per cent for the second quarter of fiscal 1994, compared to a negative 2.96 per cent for the benchmark, which uses a composite of major indices to match the company's strategic asset allocation.

"The quarter ended March 31 was a difficult quarter for both equity and fixed income markets. Our investment portfolio continues to be composed of very high quality liquid assets, generating above market returns,'' said Mr. Scott.