Bermuda-based Mutual Risk Management has announced second quarter profits to June 30 up more than 35 percent to $7,805,000 or $0.

58 per common share.

The figures compare favourably with last year's second quarter net income for common shareholders of $5,762,000 or $0.43 a share.

The strong quarter boosted the six-month profit to $14,435,000 ($1.07 per share), compared to last year's six-month figure of $11,584,000 ($0.87 per share).

"The results for the second quarter were excellent producing a 20 percent increase in risk management fees and a 25 percent increase in operating income over the 1994 second quarter, reflecting strong continued demand for the company's alternative market services,'' said chairman and CEO Mr. Robert Mulderig and president Mr. John Kessock in a joint statement.

Operating income for the second quarter amounted to $7.5 million ($0.55 per share), compared to $6 million ($0.45 per share) for last year's second quarter.

Operating income for the 1995 half-year was up to $14.6 million ($1.08 per share), a 23 percent increase over $11.8 million ($0.89 per share) in 1994.

The company's policy-issuing subsidiary, Legion Insurance Company, added 23 new programmes during the second quarter and 40 for the six-month period, compared with 20 and 33 in the respective 1994 periods.

Legion's renewal rate was 80 percent in the second quarter and 81 percent in the first half of the year.

Risk management fees increased 20 percent to $14.7 million for the second quarter and 18 percent to $28.6 million for the six-month period. The pre-tax profit margin on the risk management fees amounted to 45 percent for the second quarter and 46 percent for the first half.

Gross premiums written increased six percent to $70 million for the second quarter and rose seven percent for the half-year to $135 million.

But premiums earned fell for the quarter and the half-year by 13 percent and 18 percent, respectively.

The company said the fall reflected the continued increase in the use of large deductible policies which were introduced by the company in California during 1995 and lower premiums in California due to rate reductions, but are offset by corresponding reductions in total insurance costs, which decreased by 12 percent and 17 percent, respectively.

Both the company's captive management operation and its brokerage companies continued to perform well, contributing risk management fees of $1.9 million and $3.5 million, and pre-tax operating income of $800,000 and $1.3 million.

These operations included fees of $400,000 and $700,000 for the second quarter and six months from Shoreline Mutual Management (Bermuda) Ltd., acquired by the company during the first quarter.

Investment income for the second quarter and half-year amounted to $3.7 million and $7.5 million, increases of 34 percent and 36 percent respectively, from the 1994 periods. This was a result of an increase in invested assets and better interest rates.

Operating expenses were $8.1 million for the quarter and $15.5 million for the six months, increases of 24 percent and 22 percent, reflecting a growth in personnel and other expenses resulting from the increased number of client programmes.

STEADY UP -- The line shows a steady improvement in Mutual Risk Management share prices since January 1995. -- Bloomberg Graph