before capital gains and losses, dropped by more than 50 percent this year over last, according to just released unaudited figures.

The New York firm is 58 percent owned by Bermuda-based Zurich Centre Investments Ltd.

The company posted a net income figure to September 30 of $1.8 million or $0.07 a share, compared to the 1993 third quarter after-tax net operating income, excluding realised capital gains, of $3.7 million or $0.14 a share.

The company said that its 1994 operating income more fully reflects expenses related to building ZRC's infrastructure after the company's initial public offering in May 1993.

Nine month figures to September 30 showed an after tax operating loss of $4.7 million compared to a net operating income of $2.9 million for the same period in 1993. The majority of the year to year difference in after tax operating income, said the company, is attributable to first quarter 1994's Northridge earthquake and winter storm losses, which totalled about $7.9 million or $0.30 per share.

Net premiums written for the third quarter increased 213 percent to $91.6 million, from $29.3 million for the third quarter of 1993. Over the nine month period, cumulative writings were $207.4 million, a 184 percent increase over the three quarters in 1993.

ZRC chairman, president and CEO, Mr. Steven Gluckstern said, "Market pricing for traditional casualty lines of business shows no signs of strengthening.

"We have been able to show substantial growth in our business in two ways: by identifying pockets of rationally-priced traditional property and casualty risks and by underwriting a group of large, carefully selected specialised opportunities where our analytical skills and unique expertise add value to the transaction.'' Net earned premiums for the third quarter increased to $56.4 million, or 118 percent over the comparable 1993 period. For the nine month period, net premiums earned increased to $148.1 million or 137 percent over the comparable 1993 period. As expected, earned premium growth lagged behind written premium growth.

Executive vice president and chief operating officer, Mr. Richard Smith commented, "ZRC's July renewal period was exceedingly strong. Our premium writing momentum increased in line with our high expectations and, despite soft market conditions, we continue to be satisfied with the terms, quality and volume of the business we have reinsured.

"Our regular meetings with brokers and clients have proven to generate higher quality submissions to ZRC and our recent broker conference with our major producers was very successful.

"We have been consistently reporting the percentage of treaties in which ZRC has acted as a lead reinsurer and the percentage of contracts upon which ZRC has established an aggregate limit on its liability. I'm pleased once again to report these figures are 71 percent and 53 percent, respectively.'' ZRC's statutory combined ratio for the third quarter was 107.9 percent, down from 113.7 percent for the same period last year, while nine month figures were 117.8 percent, down from last year's 125.9 percent.

Pre-tax net investment income rose to $14.1 million for the third quarter, compared to $8.5 million for the same period last year. The third quarter was also 25 percent higher than the $11.2 million reported for the second quarter of 1994.

The rise in interest income was due to the interest generated on the additional assets raised in ZRC's 1993 debt offering, a higher yield on invested assets and an increased cash flow.

For the nine months to the end of September, the company earned $35.7 million in net investment income, versus net investment earnings of $19.9 million for the first nine months of 1993.

Cash flow from operations was $104.1 million for the 1994 nine month period, compared to $900,000 for the 1993 comparable period.

Mr. Peter Porrino, senior vice president and chief financial officer, said, "We have reiterated our total return philosophy for a number of quarters. The positive side of realising capital losses is becoming apparent, now in the third quarter, as illustrated by the dramatic increase in our investment yield.

"It is our view, that in a rising interest rate environment, where people take only investment gains and not losses, dislocations in the market occur. A total return strategy allows us to capitalise on these market opportunities, and we will continue to realise capital losses when they increase the overall economic return of our portfolio.'' Headquartered in New York City, Zurich Reinsurance Centre Holdings Inc., through its operating subsidiary, is the principle underwriting affiliate of the Zurich Insurance Company in the North American market for traditional property and casualty reinsurance.

ZRC is 58 percent owned by Zurich Centre Investments Ltd., a Bermuda-based holding company, eight percent owned by White River Corporation and 34 percent publicly held.