Strong returns on investments and increased sales of new life policies saw Pacific Century Insurance Holdings report a net profit of $102.5 million in the first quarter, compared with a loss of $10.85 million in the same period last year. The insurer, 47.8 per cent owned by tycoon Richard Li Tzar-kai's Pacific Century Regional Developments, recorded investment income of $258.18 million in the first three months, up 227.1 per cent on the previous year's $78.93 million. Peter So, the deputy managing director and acting chief financial officer, said: 'The investment markets have been very strong. The equity market is performing well. Even our cash holdings have benefited from the higher interest rate environment with large sums in time deposits earning about 5 per cent.' The insurer has reduced its bond holdings in favour of cash deposits. The strong profit in the first quarter was also driven by new sales. The company sold new life insurance policies with annualised first year premiums amounting to $76.1 million, up 49 per cent on the previous year. Total turnover - gross premiums on insurance contracts and commissions received - stood at $450.43 million, up 10.1 per cent. 'Those solid results highlight the strength of our business. We are committed to bringing strong sustainable returns to shareholders and the outlook for the first half is encouraging,' said Francis Yuen Tin-fan, chairman of the insurer. Earnings per share were 12.58 cents compared with a net loss of 1.32 cents last year. The insurer has revamped its accounts department following last year's error that forced the company in January to restate its earnings for the first three quarters of 2005 from a profit of $104.99 million to just $8.01 million. Mr So said the insurer was in the process of recruiting a new chief operating officer to replace Cheung Sum, who resigned after the accounting error.