Bermuda-based specialist reinsurer Commercial Risk yesterday announced record earnings of $25.97 million for 1998, up 34 percent on the previous year.

And total insurance volume for Commercial Risk Reinsurance Company Limited, the principal operating subsidiary of the Commercial Risk Group, reached $408 million -- an increase of 59 percent.

Gross written premiums were up by 67 percent on 1997 to $321 million while net earned premiums grew by 94 percent to $222 million.

Capital and surplus on the final day of 1998 was $235 million after the company declared a $19.5 million surplus to shareholder, Commercial Risk Partners Limited.

Commercial Risk Partners Limited president and chief executive officer Graham Pewter said the figures were very pleasing.

"The improved performance was attributable to both positive underwriting results from our prospective US casualty account and to an increased contribution to earnings from our retrospective portfolio, which continues to grow in importance.

"Investment income of $31,989,000 was 39 percent higher than in 1997, a consequence of strong operating cash flow. Also realised gains contributed $3,333,000 to earnings.

"Our revenues continue to grow at a substantial rate and 1998 was the third successive year where growth exceeded 50 percent.

"Our US portfolio is the driving force behind these advances; the result of a highly focused underwriting posture rather than the broad-based approach adopted by many other markets.

"Our strategy of assuming frequency driven exposures has served us well as, despite inevitable pressure on our underwriting margins we have been able to maintain the integrity of our pricing.

"The development of our business has been closely controlled and our underwriting and claims handling capabilities have been significantly expanded.

"Our record of sustained growth provides clear evidence of market demand for the company's innovative insurance and reinsurance products.'' Commercial Risk -- a joint venture of SCOUR and Western General Insurance Ltd.

-- underwrites an international portfolio of business through operating subsidiaries in Bermuda, the US and Luxembourg.