1992 -- the company's first full 12-month period since its breakaway from Bermuda Fire & Marine Insurance.

Income for the 12 months to December 31, 1992, came to $42.7 million, more than double the income of $20.9 million for its first six months of operation to December 31, 1991.

Expenses also doubled to $35.2 million, compared with $16.8 million for the last six months of 1991.

BF&M was incorporated in mid-1991, primarily to take over the local business previously handled by Bermuda Fire & Marine, which now handles international affairs.

Both managements have been at pains to point out over the last several months that the companies are completely separate entities.

On the income side, gross premiums earned came to $40.58 million, up by 110 percent ($21.27 million) compared with the six months of 1991.

Reinsurance income went up by 109 percent ($6.39 million) to $12.24 million, net premiums earned increased by 110.5 percent ($14.88 million) to $28.34 million, investment income went up by 108 percent ($4.4 million) to $8.48 million and commissions and other income jumped by 74 percent ($2.5 million) to $5.9 million.

On expenses, claims, benefits and claim expenses increased by 114 percent ($14 million) to $26.26 million and operating expenses went up by 92.5 percent ($3.6 million) to $7.42 million.

Depreciation and amortisation went up by 145 percent ($417,403) to $705,222 and interest on loans the company has taken out increased by 130 percent ($483,191) to $853,712.

Basic earnings per share for the year came to $1.72, compared with 88 cents for the six months of 1991.

Assets increased by 3.8 percent ($4.78 million) to $129.9 million, while liabilities crept up by one percent ($966,438) to $94.75 million.

BF&M's president and CEO Mr. Glenn Titterton told shareholders in the firm's annual report: "We anticipated that 1992 would be a difficult year and it lived up to expectations. We are therefore especially pleased to report that, despite these difficulties, the year was a successful one for the new BF&M Insurance Group.

"The year was dominated by a continuing economic recession which negatively impacted most lines of business. It was also a year of intense competition which continued to erode rates at a time when insurance costs were rising at an ever increasing pace.

"Management implemented tight control over all forms of expenditure and operating costs were contained within budget, despite several exceptional items and heavy costs associated with the implementation of new computer and operating systems in both BF&M General and BF&M Life.'' Mr. Titterton said that BF&M's general insurance division had been hit by the estimated loss of 4,712 work permits between 1989 and 1992.

He also warned that property insurance premiums are due to be raised to "realistic levels'' due to the contraction of the world's reinsurance market for catastrophes and an increase of reinsurance premiums for companies like BF&M.

"Reserves have been strengthened to enable the restructuring of our reinsurance programme in response to the rapidly changing reinsurance environment,'' he said.

On the health side, Mr. Titterton said that recent statistics compiled by the Health Insurance Association of Bermuda showed that local claims had risen by 35 percent between 1989 and 1992.

1992 ANNUAL RESULTS OF BF&M PROFIT $7.2m INCOME $42.7m EXPENSES $35.2m GROSS PREMIUMS EARNED $40.6m ASSETS $129.8m LIABILITIES $94.7m BASIC EARNINGS PER SHARE $1.72.