by 26 percent in the fourth quarter and 29 percent for the year as its programme business segment continued to grow.

Operating income increased to $16.7 million for the fourth quarter ending December 31, or 37 cents per common share on a diluted basis. For the full year, Operating income increased by 29 percent to $64.3 million or $1.44 per Common Share on a diluted basis. Return on equity continued was 21 percent for the year.

In a joint statement, Robert A. Mulderig, chairman and chief executive officer and John Kessock, Jr., president said the record returns were set as MRM saw fees in its programme business jump 67 percent for the year.

Fee income grew by 26 percent in the fourth quarter to $39.3 million and 30 percent to $149 million for the year ended 1998, as compared to $31.2 million and $114.7 million respectively in 1997. Pre-tax profit margins were 36 percent and 37 percent for the fourth quarter and full year as compared to 37 percent and 38 percent respectively, in the corresponding 1997 periods.

Net investment income increased by 14 percent to $7.8 million in the fourth quarter and by 11 percent to $29.5 million for the year. Investment yields were 7.0 percent in the fourth quarter and 6.9 percent for the year ended 1998 as compared to 6.7 percent in both of the corresponding 1997 periods.

Operating expenses increased 29 percent to $25.2 million for the quarter, compared to $19.5 million in the fourth quarter of last year, and 33 percent to $94.3 million for 1998, compared to $71.0 million in 1997. The increase in Operating expenses was attributed to recent acquisitions, growth in personnel and other expenses resulting from the increased business.

Programme business involves replacing traditional insurers and acting as a conduit between producers of specialty books of business and reinsurers wishing to write that business. The segment accounted for 56 percent of total Fee Income in the quarter and 55 percent for the year ended 1998 compared to 45 percent and 43 percent in the corresponding 1997 periods. Fees from programme business increased by 57 percent in the fourth quarter to $21.9 million and by 67 percent to $82.4 million for the year as compared to $13.9 million and $49.4 million respectively in 1997.

Gross premiums written increased 30 percent to $850.4 million for 1998 compared to $655.4 million in 1997.

MRM said financial services, the Company's newest business segment, accounted for 11 percent of total fee income in the fourth quarter and 11 percent for the year.

The segment is based on recent acquisition the Hemisphere Group which provides administrative services to offshore mutual funds and other companies.

Fees from Financial Services increased in the quarter by 49 percent to $4.3 million over the 1997 corresponding period, and by 64 percent to $14.3 million for the year, primarily as a result of an increase in the number of mutual funds under administration to 195 from 129. Renewal rates decreased in this business segment to 80 percent for 1998 as compared to 93 percent in 1997 due to the loss of a number of fund clients in the fourth quarter of 1998.

Robert Mulderig: Record fees