$18.3 million for the second quarter ended June 30, a gain of 18.3 percent over the same period last year.

For the first half of the company's financial year, net operating earnings were $34.1 million, or $1.31 per diluted share, up 16 percent from $29.4 million in the first half of 1997.

Net income, including realised investment gains and losses, increased about 25 percent to $20.6 million for the quarter, and for the six months by 30 percent to $45 million.

Terra Nova chairman John Dwyer said the growth came from acquisitions and from greater participation in Lloyd's of London through the company's Octavian syndicates.

"Our strategy of growth through the acquisition of mature portfolios of business, developed by disciplined underwriters, has enabled Terra Nova to extend its record of strong top line, profitable growth in an increasingly difficult market,'' Terra Nova chairman John Dwyer said. "Over the last two years our strategy has led to a doubling of premium revenue resulting in stronger cash flows. We saw the benefits of this strategy in the second quarter with another underwriting profit, which was influenced positively by our Octavian business, and stronger investment income.'' The net income does not include an extraordinary non-operating charge of $11.6 million, or 45 cents a share, for refinancing of a senior notes issue. During the quarter Terra Nova issued $100 million of seven percent senior notes due 2008 and used the proceeds to buy all of the group's $10.75 percent senior notes due in 2005. The reduced interest costs and fee amortisation will save the company about $2.4 million a year.

Terra Nova had gross written premiums of $129.6 million for the second quarter, up 24.5 percent. Gross written premiums for the first half were $467.8 million, up 41 percent.

"The increase in gross written premiums resulted primarily from the group's increased participation in the Octavian syndicates in 1998, $27.9 million of premiums from reinsurance to close of `orphan' Lloyd's syndicates fro the 1993 underwriting year and $18.7 million of premiums from Corifrance, which was acquired in September 1997,'' the company stated in a press release.

Net written premiums increased about 15 percent to $109.1 million in the second quarter. For the six month period net written premiums increased by about 41 percent to $390.9 million.

The company had losses, and lost adjustment expenses of $66.9 million, about $2 milion more than second quarter 1997. For the six month period Terra Nova had $162.1 million in losses, a gain of 39 percent over the first half of 1997.

Terra Nova had total assets of $2.4 billion compared to $2.2 billion a year ago. Shareholders equity was $517.5 million, up 7.4 percent.