announced disappointing second quarter and first half results on Wednesday, with net income for the three months ending June 30 dropping by more than a third from last year's figure to $11.968 million, or 29 cents per share.

For the half-year, the company's net income was $18.89 million, compared with $36.89 million for the first six months of 1999. MRM attributed the loss partly to operating expenses, which increased 24 percent to $37.7 million for the quarter, compared to $30.4 million during the same period last year. For the first six months of 2000, operating costs stood at $72.4 million, compared with $59.5 million last year.

Fee income increased ten percent in the second quarter to $50.4 million and five percent to $95.7 million for the first six months of 2000, compared to $45.8 million and $91.3 million, respectively, in 1999.

But MRM's operating income for the second quarter decreased 37 percent to $12.3 million or $0.30 per common share.

MRM profits decline Operating income for the first six months fell 38 percent to $23.8 million or $0.57 per common share on a diluted basis, compared to the same periods in 1999.

"Operating results for the second quarter and first half of 2000 produced substantial improvement in fees, operating income, profit margins and return on equity compared to our last three quarters,'' said Robert Mulderig, chairman and CEO and president John Kessock, Jr. in a joint statement.

"However, comparisons to the first half of 1999 continue to reflect the decline in operating results, which took place in the 1999 third quarter. The commercial lines insurance market has finally improved after many years of decline and this is beginning to help our corporate risk management business segment, which has been adversely affected by depressed commercial lines pricing.'' The company's net investment income decreased by ten percent to $8.5 million in the second quarter but increased by 27 percent to $21.1 million for the first six months of 2000.

Programme business accounted for 57 percent of total fee income in the quarter and 56 percent for the first six months of 2000 compared to 57 percent and 54 percent in the corresponding 1999 periods. Programme business fees increased 11 percent in the second quarter to $28.9 million and ten percent to $53.9 million in the first six months as compared to $26.0 million and $49.0 million, respectively, in 1999.

This resulted primarily from the growth of existing programmes as a result of premium increases and decreased competition. Pre-tax margins were 27 percent for both the quarter and six months of 2000, down from 36 percent for the corresponding periods of 1999.

Gross premiums written increased 18 percent to $656.1 million for the first six months of 2000 as compared to $556.3 million in 1999, growth that MRM attributes to the increased activity of its programme business segment.

Premiums earned increased 27 percent to $64 million in the second quarter and 35 percent to $119.9 million in the first six months of 2000, as compared to $50.2 million and $89 million in the corresponding 1999 periods.

Corporate risk management accounted for 23 percent of total fee income in the second quarter and for the first six months of 2000, down from 26 percent and 29 percent in the corresponding 1999 periods.