Bermuda-registered ESG Re Limited yesterday reported a marginally improved quarter with losses of $1.8 million.

This compares with a net loss of $5.5 million for the same quarter last year and $24.7 million losses for the previous quarter.

The company wrote down $3.9 million of estimated premium income for their North American business.

Underwriting profits for the quarter amounted to $2.5 million, investment income was $1.0 million and operating expenses were $6.4 million, despite adverse movement in the euro for the quarter.

The quarter resulted in an overall net loss of $0.16 per share.

In assessing the first quarter chief executive officer Alasdair Davis said: "The completion of the reaudit of 2001 and the audit of 2002 took considerable time and attention during the quarter. Until we were able to publish our audited financials, we were significantly handicapped in our ability to produce new business.

"In the second quarter we have been able to direct our full attention to building new business and effectively managing the business already on the books. We intend to remain in this business. Clean audited accounts allowed us to restart the new business process and focus on our clients".

Looking forward, Mr. Davis continued by saying that "our clients and prospects see that ESG is sufficiently capitalised with solid bond assets writing business in which we are experienced and that we understand.

"We have already acquired a new North American client who will be coming on board mid-year and will bring in an estimated $20 million in premium income."

ESG Re provides medical, personal accident, credit life, disability and special risks reinsurance to insurers and selected reinsurers on a worldwide basis.