yesterday it plans to return to its roots as a property catastrophe reinsurer.

The Bermuda-based reinsurer said it will take a $35 million charge against second quarter earnings to cover potential losses in non-catastrophe insurance lines of business which the company has entered in recent years.

The charge, the equivalent of 1.68 cents per share, comes after the company engaged in a strategic review of its business and reserves, said LaSalle Re chairman and chief executive Victor Blake.

Mr. Blake said the company would now focus on the catastrophe reinsurance business which it was originally formed to underwrite.

The company said case reserves and reserves for incurred but not reported claims were being strengthened for non-catastrophe exposed lines of business, including aggregate stop loss coverage for extended warranty and motor physical damage reinsurance contracts.

"We have been part of an industry caught in a prolonged soft insurance market cycle which has created excessive competition and over supply of capital,'' said Mr. Blake. "In diversifying our portfolio, certain lines of business have proven to be unprofitable. We have identified the unprofitable lines of business and discontinued them.

"We have reaffirmed our underwriting strategy as a specialty catastrophe reinsurer emphasising low frequency, high severity business. We believe that LaSalle Re's reserve position will be among the strongest in the reinsurance industry with the action we have taken.''