Troubled Bermuda life reinsurer Annuity and Life Re (Holdings) Ltd. predicted yesterday that it expects to report a $103 million loss for the fourth quarter of 2002 and a $132 million loss for the year when it releases its delayed results.

Annuity said it expects to release its operating results and earnings for 2002 by April 7 and to file its Annual Report to the Securities and Exchange Commission by April 15, 2003.

The company said the predicted losses were a result of an "adverse mortality experience" driven by an unexpected increase in the number and size of reported claims during December 2002 and January 2003, losses incurred in connection with the novation of certain life reinsurance contracts to XL Life and the retrocession back to the company of a portion of certain of those contracts, deferred acquisition cost write downs associated with the company's largest annuity reinsurance agreement, losses associated with the termination or recapture of certain of the Company's reinsurance agreements and increases in the company's reserves for guarantees associated with variable annuity contracts.

The company said it incurred losses of approximately $9.2 million and $20.2 million for the quarter and year ended December 31, 2002 in connection with the net change in the fair value of the embedded derivatives recognised in certain of its annuity reinsurance agreements pursuant to accounting rules.