BISYS said the soft market affected its insurance wholesalebusiness as the company reported a 17 percent decline in itsinsurance services segment for the first half of the fiscal yearafter the release of its second-quarter earnings report.

As a whole, the company reported net income was down 36 percent,or $8 million, in the quarter from $22 million to $14 million.Earnings per share dropped from 19 cents to 12 cents. Revenuesincreased 7 percent, or $14 million, going from $207 million to$221 million.

The Roseland, N.J.-based investment and insurance servicesprovider reported insurance services dropped $3.4 million for thethree months ending Dec. 31, from $19.9 million to $16.5 million.Insurance services revenues rose 1 percent in the period, or$713,000, from $64.5 million to $65.2 million.

For the first half of its fiscal year, which runs July 1 to Dec.31, operating earnings also dropped 17 percent, or $5.6 million,going from $32.7 million to $27.1 million. Revenues rose more than3 percent, or $4 million, from $121 million to $125 million.

BISYS operates a wholesale insurance division that involvescommercial property-casualty, long-term care, disability, annuityproducts and life insurance.

The company said the soft market impacted commercial insurancesales, producing weaker than expected renewal rates in some productlines.

In a statement BISYS said the decline in operating earnings wasprimarily due “to the near-term impact of acquisitions in bothbusinesses and continuing investments in the businesses forlong-term growth offset by a $1.9 million gain recognized incommercial insurance on the sale of a book of business during thequarter.”

The increase in the insurance services segment revenue, thecompany said, was due to the “positive contribution of recentacquisitions.”

The company added that organic revenues were down 4.5 percentwith life insurance organic revenue virtually flat.

BISYS, in a Securities and Exchange Commission filing, said itpaid $4.4 million for D&O Concepts Inc., David A. RatnerAssociates Inc. and David A. Ratner Associates of New Jersey Inc.,an agency and wholesale affiliate.

James C. Hermann & Associates Ltd. was purchased for $2.3million. Both acquisitions took place in September and includeearn-outs, payments for the performance of the book over a periodof time.

BISYS said acquisition of Truckwriters Inc., which was part ofthe Zurich Group, was for $11 million. Truckwriters is a managinggeneral agency program catering to transportation programs.

The company also reported that it has received $16 million frominsurers on its directors and officers policy and $5 million on itserrors and omissions policy related to litigation over itsrestatement of earnings and subsequent shareholders suits.

In a settlement arrangement, the company has agreed to pay $66.5million.

For the company as a whole, in the first six months net incomedropped 21 percent, or $7.4 million, from $35.7 million to $28.3million. Earnings per share decreased from 30 cents to 24 cents.Revenues were up 5 percent, or $20 million, from $413 million to$433 million.

The drop in income was due to the loss of discontinuedoperations. Excluding discontinued operations, income rose 26percent in the second fiscal quarter and rose 35 percent for thesix months.