U.S. reinsurers as a group saw net income increase 7 percent inthe first quarter of 2005, according to a report by London-basedBenfield.

The reinsurance and risk intermediary's study of 13 reinsurersincluded a warning that "the impending hurricane season andanticipated reserve strengthening during the rest of 2005" willimpact earnings of the companies that were studied.

Benfield said its research found income in the first quarter wasincreased by the lack of a major catastrophe and favorable reservedevelopments.

The company noted that only two of the companies studied==SwissRe and Odyssey America==produced a net loss. The average combinedratio of the U.S. companies tracked by Benfield improved by onepoint to 93.4.

"Many U.S. reinsurers remain steadfastly committed tounderwriting discipline, with market conditions proving unfavorablefor certain lines of business==such as property-catastrophe innon-affected hurricane areas and [directors and officers] liabilitybusiness," said Darren Oliver, author of the report and a member ofBenfield's Industry Analysis and Research team.

Mr. Oliver added that the discipline shown by companies resultedin a 9 percent drop in total gross premiums written in the firstquarter, "due to non-renewal and cancellation of contracts deemedto have unattractive terms/conditions or technically inadequatepricing for the current market environment."

The report said that "Although the loss-affected areas of theU.S. and some casualty lines (in particular medical malpractice)remain robust" the reinsurers studied have been disciplined inselecting risks.

Benfield reported on Swiss Re America, QBE Re Corp, OdysseyAmerica Re, Berkley Insurance Company, American Agricultural,American Re, Transatlantic Re, Everest Re Company, GE InsuranceSolutions, XL Re America, National Indemnity, Folksamerica Re andGeneral Re.

In the first quarter of this year, Benfield noted NationalUnderwriter/Highline Insurance Data Services figures showing thetop-five companies for gross premium written were: Swiss Re America($1.18 billion), National Indemnity ($1.1 billion), American Re($954 million), Transatlantic Re ($913 million), and Everest Re($846 million).

Among the reinsurers studied, researchers noted that the biggestreduction in premium income was at General Re, which saw a declineof 30 percent==from $749 million in last year's first quarter to$523 million for the same period this year. The biggest increase inpremiums written was 16 percent at Swiss Re, which last year wrote$1.03 billion.

A full copy of the report can be viewed online athttp://www.benfieldgroup.com/research/reports/industry+analysis+and+market+review/busq_1q_2005_calm_before_storms.pdf