Bermuda-based Annuity and Life Re (Holdings), Ltd. has reported its net income is down nearly 10 percent or $1.6 million to $15.6 million for the six months ending June 30, 2000.

This compares to the previous year's six-month figures for 1999 which stood at $17.2 million.

Total revenue, however more than doubled to over $126.9 million in this period compared to the year before due to expansion into life reinsurance which has dramatically increased sales.

Lawrence S. Doyle, President and Chief Executive Officer, said: "We were pleased to see our operating results return to normal. The margins on our life business improved by six points from last quarter.

"Our U.S. subsidiary, with licences in 43 states, is now up and running. New business opportunities continue to expand as we receive greater recognition in the marketplace.'' The company reported net operating income, excluding realised gains/losses on investments, for the quarter ended June 30, 2000 of $10,240,000 or $0.37 per share, compared with $8,904,000 or $0.33 per share for the quarter ended June 30, 1999.

Net operating income for the six months ended June 30, 2000 was $18,617,000 or $0.68 per share, up from $17,123,000 or $0.63 per share for the six months ended June 30, 1999.

During the six-month period of 2000, the company said its investment portfolio was repositioned to improve performance, resulting in realised investment losses of $2,981,000 compared with investment gains of $106,000 for the six-month period ended June 30, 1999.

Offsetting the realised losses were unrealised gains of $3,271,000, resulting in an overall gain for the period. The gains and losses are primarily related to changes in the general level of interest rates during the periods. The average annual yield rate earned during the six-month period ended June 30, 2000 was 6.52 percent, compared with 6.31 percent for the six months ended June 30, 1999.

Total revenue for the quarter ending June 30, 2000 escalated 60 percent to $62,675,000, compared to $39,041,000 for the quarter ending June 30, 1999.

Total revenue for the six months ended June 30, 2000 was $126,948,000, up 67 percent compared to $75,950,000 for the same six months in 1999.

Operating expenses were 3.5% of total revenue as compared with 4.7% in 1999.

The net operating income for the quarter ending June 30, 2000 is consistent with our business plan.

The company said as it had explained previously, the growth in business is primarily driven by new life reinsurance volume, which increases revenue at a quicker rate than operating income. Annuity and Life Re (Holdings), Ltd.

provides annuity and life reinsurance to insurers through its wholly owned subsidiaries, Annuity and Life Reassurance, Ltd. and Annuity and Life Re America.