million or 49 cents per share in its first quarter, partly as a result of a significant jump in operating income.

In a joint statement, chairman and CEO, Mr. Robert Mulderig and president Mr.

John Kessock Jr. said: "The operating results for the first quarter were excellent, producing a 22 percent increase in operating income reflecting strong continued demands for the company's alternative market services despite the impact of workers' compensation reform.'' MRM's policy issuing subsidiary, Legion Insurance Company, added 17 new programmes during the period compared to 13 in 1994.

Risk management fees increased 16 percent to $13.8 million for the first quarter, up from $11.9 million for the first quarter of 1994. The pre-tax profit margin on these risk management fees amounted to 47 percent for this year's first quarter, compared to 48 percent for 1994's first quarter.

Gross premiums written increased eight percent to $65 million, compared to $60 million in last year's first quarter.

Premiums earned decreased 23 percent compared with the same period last year.

The decrease reflected, the company said, a continued increase in the use of large deductible policies which were introduced by the company in California during the first quarter and is offset by a corresponding reduction in total insurance costs which decreased by 21 percent.

The firm said that both its captive management operation and their brokerage companies performed well during the period, contributing risk management fees of $1.6 million, an 86 percent increase over the 1994 corresponding period and pre-tax operating income of $600,000, a 166 percent increase over 1994.

The operations included fees of $300,000 from Shoreline Mutual Management (Bermuda) Ltd. which was acquired by the company during the review period.

Investment income was $3.8 million, a 36 percent increase, as a result of an increase in invested assets and generally higher interest rates.

Operating expenses were up 19 percent to $7.3 million, attributed to the growth in personnel and other expenses as a result of an increase in the number of client programmes.

Assets rose from $1.018 billion to $1.111 billion during the three month period and shareholders' equity went from $122 million to $135 million.