Bermuda-based Oil Casualty Insurance, Ltd. (OCIL) has declared net income of $62.1 million, and marked a seventh consecutive year of financial improvement.

Total assets rose 13 percent to $521.6 million and total shareholders' equity (capital & surplus) increased 12 percent to $442.3 million.

President and CEO, Jon R. King, said, "It was clear last year, that OCIL would be challenged in 1997, as it entered its second decade of service to the energy industry.

"Since 1994, OCIL has come a long way. We have been able to significantly strengthen the company's financial condition, with an average annual growth rate of 20 percent. Net income increased to $62.1 million, up over 17 percent from $53 million in 1996, as net realised gains on the sale of investments more than offset a drop in net premiums earned. At the same time, we were able to hold expenses to 1996 levels.'' OCIL's global membership of 66 energy companies exceeded $980 billion in gross assets and $908 billion in gross revenues, representing most of the world's leading international oil and petrochemical companies.'' Mr. King said, "Today, we insure eight of the ten largest petroleum refining companies and four of the six largest chemical companies as measured by The Fortune 500.'' OCIL's financial strength, as measured by its overall claims-paying ability continues to improve and currently provides for the potential payment of more than six $100-million losses in one policy year.

This provides a high degree of security to policyholders, considering that in the company's 11-year history only four industry losses have exceeded OCIL's current minimum $50-million attachment point. OCIL paid three of the losses and the fourth loss occurred to a current policyholder prior to joining OCIL.

Underwriting income decreased 20 percent in 1997 to $18.3 million, as net income increased 18 percent. OCIL said this was attributable to the fall in premium volume that was more than offset by strong investment returns.

Premiums written fell 12 percent to $36.6 million, including $35.3 million in general liability premium, the highest in five years, and, $1.1 million in directors & officers premium.

Losses and loss expenses dropped from $5.8 million to $5.1 million in 1997.

Mr. King said, "During the year, OCIL redefined its membership base as `energy,' rather than `petroleum' in order to recognise its recent growth and the further opportunities that the company can offer to a broader range of potential policyholders.

"Despite a very competitive market, we were fortunate to welcome four new members in 1997 from the petrochemical and petroleum segments of our business.'' Despite severe competition and energy industry restructuring, OCIL has retained more than 90 percent of its members, since inception.

Mr. King added, "We did not expect much growth in membership in 1997, given the high level of participation we have achieved in the energy industry and the accelerated consolidation of businesses within the industry, but we attracted four companies with some $80 billion in total assets.'' He sees a continuation of the soft market as long as surpluses continue to grow, and the extended capital base keeps business profitable and viable, at least in the short term.

He said, "In the next five years, the industry will, most likely, see dramatic changes as insurers, reinsurers, and intermediaries continue to consolidate and redefine their respective roles. This transformation will produce new products, distribution channels, and players that are just beginning to emerge.

"We are optimistic about the future and have a single-minded mission and purpose -- to provide insurance products that ensure the coverage, consistency, security, efficiency and commitment desired by our energy industry members.

"All of us at OCIL remain focused on building an insurance business that can continue to maximise shareholder and policyholder value. I am confident we will succeed. In the end, the company's success depends on our willingness to continually re-evaluate the business, look at the possibilities, and then set our mark for the future.'' OCIL: '97 figures Net income: $62.1 million; Total assets: $521.6 million; Shareholders' equity: $442.3 million; Underwriting income: $18.3 million; Premiums written: $36.6 million; Losses and loss expenses: $5.1 million