Bermuda-based Max Re yesterday reported a net loss for the three months ending September 30, 2001 of $8.7 million, or $0.25 per share, compared with net income of $9.2 million, or $0.33 per share for the three months ending September 30, 2000.

Net loss for the nine months ended September 30, 2001 was $7.6 million, or $0.25 per share, compared with net income of $4.9 million, or $0.21 per share, for the nine months ending September 30, 2000.

The third quarter net loss is being attributed, in large part, to the events of September 11. Robert J. Cooney, Max Re Chief Executive Officer, said of the results: "The tragic and catastrophic events of September 11 severely tested the risk management practices and controls at Max Re.

Mr. Cooney added: "Simultaneously, both the liability and asset side of our balance sheet were severely stressed. Our underwriting results incurred $3.0 million in incremental losses, and a conservative net reserve for that amount was posted during the quarter for World Trade Center claims.

"Our alternative investment portfolio recorded a 134 basis point loss in September, resulting from the volatile markets following September 11."

But, amidst reports of net losses for the last quarter, the young company - it was set up in 1999 by the former XL Insurance guru, and it recently completed its initial public offering of 12 million shares - saw growth in business. Gross written premiums and deposits for the three months ending September 30, 2001 were $48.7 million, compared to $35.4 million for the same period of 2000, which represents an increase of 38 percent.

Net written premiums for the three months ending September 30, 2001 were $36.0 million, compared to $35.4 million for the same period of 2000. And net earned premiums for the three months ended September 30, 2001 were $55.5 million, compared to $51.9 million for the same period of 2000.

Gross written premiums and deposits for the nine months ending September 30, 2001 were $563 million, compared to $306.2 million for the same period of 2000, which represents an increase of 84 percent. Net written premiums for the nine months ended September 30, 2001 were $391.9 million, compared to $306.2 million for the same period of 2000. Net earned premiums for the nine months ended September 30, 2001 were $257.3 million, compared to $288.6 million for the same period of 2000.

Senior Vice President and Controller Jim Teef said the company's outlook is bright: "We are still a new company; we are still evolving. Last year we were staffing up, but now we have a full complement of staff. And we have added two staff to our property and casualty group during this quarter. Business is robust," he said.

Total revenue for the three months ending September 30, 2001 was $65.3 million, compared to $66.9 million for the same period of 2000. Total revenue for the nine months ending September 30, 2001 was $308.1 million, compared to $304.6 million for the same period of 2000. The cost of funds, which is the expected cost of the Company's liabilities, declined to 6.33 percent as of September 30, 2001 from 6.40 percent as of June 30, 2001.

General and administrative expenses for the three months ending September 30, 2001 increased to $5.0 million from $3.8 million for the same period of 2000, when the Company was still building to a full operational level.

General and administrative expenses for the nine months ended September 30, 2001 were $14.6 million, or 4.19 percent of net earned premium and deposits, compared to $10.2 million, or 3.54 percent of net earned premium and deposits for the same period of 2000.

Invested assets increased to $1.4 billion as of September 30, 2001, with an allocation of 59.6 percent to cash and fixed maturities and an allocation of 40.4 percent to alternative investments. The invested assets to minority interest and total shareholders' equity ratio was 1.96 at September 30, 2001.

During the three months ending September 30, 2001, the Company completed its initial public offering of 12 million shares at $16 per share, producing net proceeds of $179.5 million. Minority interest and shareholders' equity reached $699.0 million at September 30, 2001.

Combined book value per share, including conversion of the non-voting Max Re Ltd. common shares held by the founding investors, at September 30, 2001 was $14.84.