Bermuda-based SCUUL Ltd. has declared net income for the year to December 31 at $1,554,483, a near 52 percent drop when compared to the year before.

Through subsidiary and Class Three insurer, School College and University Underwriters, Ltd. (SCUUL Bermuda), SCUUL Ltd. is the provider of insurance and reinsurance coverages uniquely designed for US educational institutions.

Based on being the preeminent provider of insurance to the US educational community, fundamental SCUUL principles include the provision of a stable and consistent market for insureds, with rational pricing throughout the property casualty underwriting cycle.

SCUUL has been discussing the pros and cons of the company going public, with chairman William S. Reed putting the matter down to liquidity.

He said in the firm's annual report, "This issue was very thoroughly researched about five years ago, concluding with a view toward considering an initial public offering (IPO).

"While the decision reached was that timing was not propitious, there was a commitment made to continue to review and offer some means of liquidity.

"Interim efforts have been undertaken to offer alternate forms to existing shareholders but little interest has been shown in them. The time may be drawing near for another in-depth consideration of the alternatives, including an IPO.'' Last year SCUUL restructured and re-oriented its governance after a past which placed total emphasis on SCUUL Bermuda.

Mr. Reed said, "We have found during the recent past years that in order to be the preeminent provider of insurance and risk management solutions to education, more was required than simply providing excess liability and educators legal liability coverages.

"By responding to the needs of United Educators, its principal reinsured, SCUUL Bermuda entered into the reinsurance of umbrella liability, buffer liability, limited professional liability and, most recently, primary general liability.

"But even that was not enough. Increasingly, the management of (SCUUL insurance management subsidiary) United Insurance Management Co. (UIMC) has found that property insurance, automobile insurance and even workers compensation insurance may be needed for the total solution.

"Because of those requirements, which exceed the abilities of SCUUL Bermuda alone, UIMC has found that strategic partnerships or joint ventures can best respond.'' SCUUL president and CEO, Thomas V.A. Kelsey, said that SCUUL's performance was positive, even while facing underwriting adversity.

Total invested assets grew and reserves were strengthened, which led to negative underwriting income for the year.

Gross written premiums increased by 21 percent to $41.1 million. Excess and general liability lines had a 20 percent premium increase to $13.2 million.

Educators' and other professional legal liability lines rose 19 percent to $21 million. And reinsurance premium for public school district pools and an education group captive insurer rose 32 percent to $6.9 million.

Underwriting income suffered a loss of $10 million, as operating income which includes realised gains or losses on securities transactions, fell 57 percent to $1.2 million.

Investment income continues to be the key contributor to bottom line profit and was 12 percent higher at $10.8 million.

SCUUL's assets at year end stood at $207.7 million, an increase of 16 percent, and its reserves for both outstanding and incurred but not reported claims increased by 32 percent to $99.7 million.

SCUUL had to increase reserves for educators legal liability losses by $11.3 million, for claims related to the 1994 to 1997 accident years.