Bermuda-based Scottish Annuity & Life Holdings, Ltd. (Scottish) yesterday reported earnings which the company said had been affected by increased claims in the wake of the September 11 attacks.

Net operating earnings increased 17 percent to $8.2 million, or $0.49 per diluted share for the quarter ended December 31, 2001, compared to $7 million, or $0.44 per diluted share for the prior year period.

In the quarter ended December 31, 2001, the company expensed three additional claims totalling approximately $120,000 related to the September 11 attacks, but Scottish does not expect any additional claims expense arising from the September 11th since it believes sufficient time has passed since that date as well as the company's reinsurance coverage.

Net operating earnings for the year increased 34 percent to $21.6 million, or $1.31 per diluted share from $16.2 million, or $1.01 per diluted share for the prior year period.

Net income for the quarter was $3.7 million, or $0.22 per diluted share as compared to $7.0 million, or $0.44 per diluted share for the prior year period, and $16.8 million, or $1.02 per diluted share for the year compared to $16.0 million, or $1.00 per diluted share for the prior year period.

Net income in the quarter was adversely impacted by capital losses of $2.6 million realised upon the sale or write-down of fixed income securities issued by Enron and capital losses of $4 million realised upon the sale of collateralised bonds issued by the Osprey Trust, an Enron-related finance company.

"This financial report highlights another successful year devoted to building the company's earnings power and franchise value," said Michael C. French, Chairman and Chief Executive Officer of Scottish Annuity & Life. "Our operating results continue to reflect the significant enhancements we have made to our business model and management team, as well as our continuing commitment to building value for all shareholders. During the year there were many important accomplishments at Scottish Annuity. We tripled the amount of traditional life reinsurance in-force, doubled our fixed annuity reinsurance business and gained meaningful traction in our Wealth Management business. In addition, we completed the acquisition of World-Wide Reassurance, welcomed Pacific Life as our new strategic partner, added four world-class directors to our holding company board and listed on the New York Stock Exchange last month."

On the web: http://www.scottishannuity.com.