a 16 percent fall in net income during 1998 according to rating agency A.M.

Best Co.

The falls, attributed to higher underwriting losses and declining investment income, point to the deteriorating condition of the industry and could affect companies in Bermuda.

A.M. Best reported that the average combined ratio, a measure of underwriting profitability, was 105.6 for the year -- four points worse than 1997.

"The 1998 results also included less favourable emergence of commercial reserve development, heavier price cutting across most commercial lines and continued costs associated with upgrading technology,'' A.M. Best stated.

The industry incurred about $10.1 billion in catastrophe losses during the year, exceeding the $8.9 billion yearly average over the past ten years.

Hurricane Georges caused an estimated $2.9 billion in insured losses, while Hurricane Bonnie caused $0.4 billion in the US South-east region.