for Bermuda-based Mutual Risk Management Ltd. (MRM).

In a joint statement from the company, Robert A. Mulderig, Chairman and Chief Executive Officer and John Kessock, Jr., president said the results reflected strong growth of fee income across all the company's business segments, improved profit margins and a significant increase in operating income.

"Our insurance services businesses are benefiting from an improved primary property-casualty insurance market, where rates have finally begun to increase after many years of decline,'' the release said.

"Programme business fees grew by 24 percent to a record $33.3 million, aided by increased primary rates and a general reduction in competition, despite the significant loss of fees on programs terminated over the last year.

"Corporate Risk Management fees increased by nine percent and sales of new Corporate Risk Management business have been strong recently.'' MRM reported that its financial services fees increased by 48 percent in the third quarter, aided by strong growth in assets in fund administration business, which now exceed $31 billion.

"We believe that these operating results demonstrate significant progress toward a return to our historic levels of growth and profitability,'' the release said.

Fee income grew by 22 percent in the third quarter to $55.8 million and 11 percent to $151.5 million for the nine months of 2000.

Pre-tax profit margins were 28 percent for the third quarter and 27 percent for the nine months of 2000 as compared to 27 percent and 32 percent in the corresponding 1999 periods.

Operating income increased 83 percent to $13.4 million or $0.32 per diluted share for the third quarter of 2000 as compared to $7.3 million or $0.17 per diluted share in the 1999 third quarter.

For the nine months of 2000, Operating income amounted to $37.2 million or $0.89 per diluted share as compared to $45.4 million or $0.99 per diluted share in 1999.

During the third quarter of 1999, the Company established a provision related to net losses incurred on a number of terminated programmes of $8 million net of tax, or $0.18 per diluted share.

Net investment income increased by 7 percent to $9.2 million in the third quarter and by 20 percent to $30.3 million for the first nine months.

Investment yields were 7.4 percent in the third quarter and 8.0 percent for the nine months of 2000 as compared to 6.0 and 6.8 percent in 1999.

The nine-month increase includes $3.7 million of investment income from a special purpose entity, Endeavour Real Estate Securities Ltd. (`Endeavour') recorded in the first quarter of 2000.

Endeavour was established by the Company's Financial Services segment to offer offshore investors an opportunity to invest in US real estate investment trusts.

The investment income from Endeavour in the first quarter was offset by $1.4 million of realized losses, $1.9 million of interest expense, $0.9 million of operating expenses and $(0.8) million of minority interest.

In the second quarter of 2000, the ownership structure of Endeavour was changed so that it is no longer consolidated on a line by line basis, but is accounted for on an equity basis.

Operating expenses increased 20 percent to $40.0 million for the quarter, compared to $33.4 million in the third quarter of last year, and increased 21 percent to $112.3 million for the nine months of 2000, compared to $92.9 million in 1999.

The increase in operating expenses is attributable to growth in personnel and other expenses to service the company's business, the effect of recent acquisitions and $0.9 million of operating expenses from Endeavour recorded in the first quarter of 2000.

During the third quarter, the company completed the refinancing of its former bridge loan facility. Amounts outstanding under the bridge loan facility were refinanced through a $180 million, three year syndicated bank facility and by a private placement of $40 million of 33-month floating rate trust preferred securities, known as RHINOS, with a trust organized by Banc of America Securities LLC.

Interest expense increased by $10.0 million for the nine months of 2000 as a result of increased debt, higher interest rates and Endeavour interest, offset in part by a reduction in debenture interest over the same 1999 period.