reported gross reinsurance premiums of $22.9 million for the company's first full year of operation.

The company was formed in 1997 with $75 million from XL Capital and $25 million from Risk Capital Reinsurance Co., a subsidiary of Risk Capital Holdings.

Company chairman and chief executive officer Richard Meyer said underwriting performance in South and Central America, Mexico and the Caribbean exceeded projections by 31 percent.

"Our success in the region has been bolstered by continuing economic reform and liberalisation that have stimulated business activity and generated greater demand for reinsurance and alternative risk management solutions and services,'' he stated in the company's 1998 annual report.

The company had net income of $3.8 million for the year.

Mr. Meyer said he expected the market to double its current 1.2 percent share of the global insurance market over the next ten years.

"Looking ahead, we seek to capitalise on two major trends -- expected long-term economic growth and evolving demand for new products -- through our ability to provide a mix of traditional reinsurance and alternative risk management products,'' he stated.

To capitalise on the expected growth the company has opened offices in Bogota, Buenos Aires, Mexico City and Sao Paulo. In the short term that growth may be hampered as the region adjusts to new government monetary policies and global economic events.

The company has received an "A-minus''(excellent) rating from A.M. Best and an "A'' rating from Duff & Phelps.

About 22 percent of the company's business is in Chile, 18 percent in Colombia, 17 percent in Mexico, 15 percent in the Caribbean, nine percent in central America, and the rest in other countries.

About 45 percent of the business was in property reinsurance, 13 percent in motor, 13 percent in marine, nine percent in workers' compensation, six percent in surety, five percent in engineering and nine percent in miscellaneous.

The company paid out $5 million in claims for the effects of Hurricane Georges and another $200,000 for Hurricane Mitch. The company earned $10.3 million on its investments. Investment assets at the end of the year were $121.4 million, made up of 47 percent cash and cash equivalents and 53 percent in fixed income securities.