1997 year, a three percent decline over the 1996 year ended December 31.

Company president and chief executive officer Glenn Titterton said despite the decline, performance was better than projected.

"We budgeted for a modest reduction in net earnings in part because, as previously reported, claims were exceptionally low in 1996 and it was prudent to anticipate higher claims in 1997, and also because we projected a decline in some rates during 1997,'' he stated in an announcement to shareholders.

During the year income increased by nine percent to $60.2 million, while gross premiums earned increased by six percent to $60.8 million.

A 12 percent increase in claims and claim expenses resulted in a similar increase in overall expenses to $50.4 million. The company also reported continued growth in its major lines of business, in which market share was maintained or strenthened.

"Looking ahead, the BF&M insurance group is being re-focused to ensure our future and our continued growth in a rapidly changing business environment,'' Mr. Titterton stated.

BF&M Ltd. is the holding comapny for subsidiaries which provide property, casualty, motor, marine, and group life and health insurance. The company also owns Fortress Insurance, a rent-a-captive facility, and BF&M Brokers.

Many of the shareholders in the publicly-held company are defendants in a suit brought against them by liquidators of Bermuda Fire & Marine. The liquidators and creditors want the shares returned to Bermuda Fire as part of its assets.

Because of the suit BF&M common shares were suspended from trading on the Bermuda Stock Exchange since October 1995. The company's preference shares last traded at $9 on April 2.