The combined capital and surplus of Bermuda's Class Four insurers and reinsurers grew last year by a significant six percent to $9.4 billion.

But in the prolonged period of a soft market, gross premiums written by the group decreased a modest three percent to $3.3 billion, as net premiums dropped seven percent to $2.8 billion.

The total assets of the Class Four companies strengthened by some seven percent to $17.6 billion.

The figures were gleaned from statutory financial returns filed with the Registrar of Companies by Class Four licensed companies at December 31.

In releasing the figures, Registrar Kymn Astwood said, "The leaders of the market have utilised this time of slow premium growth to consolidate and direct their investment strategies to maximise profits and sustain their companies when some thought that the market would see massive declines and there would be a mass exodus of Class Four insurers.

"Indeed, we are seeing that expectations of Bermuda's market are upbeat, with Class Four insurers investing in the infrastructure of Bermuda with new building initiatives being undertaken.'' Mr. Astwood said the gross and net premium writings indicated that while pricing may be competitive, Bermuda's Class Four insurers are resisting the temptation to engage in price wars as a means of remaining profitable.

He said, "It seems to us that the conservative nature of the underwriting strategies of these companies clearly demonstrates a commitment to security and claims paying ability and a laudable policy of resisting temptation to write business at the wrong price.'' He also stated that prudent investment techniques and consolidation had helped Bermuda's large commercial insurance and reinsurance groups to withstand the impact of the soft market conditions through 1997.

He said the statistics demonstrate the local industry's consistent ability to produce strong results despite weal market conditions.

Under Bermuda's system of insurance regulation, Class Four companies which are typically excess liability and property catastrophe firms underwriting non-related, open market risks, are each required to maintain capital and surplus of $100 million.

These companies, which include some of the biggest corporations of their kind in the world, must comply with stringent solvency requirements that are designed to protect policyholders.

Additionally, of those companies receiving a rating from A.M. Best and Standard & Poor's, about 90 percent received an `A' rating or better.

As of Tuesday, the registrar counted 20 registered Class Four insurers and reinsurers.