Bermuda reinsurer Everest Re has announced that it believes it will be hit with a $25 million bill after the collapse of global energy giant Enron Corporation earlier this month.

The company's shares fell yesterday by 2.9 percent to $67.23 on the New York Stock Exchange following the preliminary estimate of the loss.

The company was also hit by a $75 million bill for its exposure to the World Trade Center in September, which led to a net loss during the third quarter of $37.7 million or 80 cents a share compared to net income of $47.7 million or $1.03 a share in the third quarter of 2000. A release said: "Everest Re Group Ltd. has made a preliminary estimate that the loss arising from the severely deteriorated financial condition of the Enron Corporation will amount to approximately $25 million after reinsurance and tax recoveries, with a resulting impact on its fourth quarter 2001 operating earnings and net income of approximately $.50 per diluted share."

Everest said the estimated unusual loss "reflects all of the company's projected exposure including underwriting, credit and investment".

As of September 30, 2001, Everest Re Group had total assets in excess of $7.6 billion and shareholders' equity exceeding $1.7 billion.

XL Capital Ltd. said last week that the company will only be minimally affected by Enron Corporation's bankruptcy. In a statement the company said it does not have exposure to the asset backed commercial paper programme of Enron Funding Corp.

The statement said: "The insurance policy supporting the Enron Funding Corp. programme was written by Winterthur International Insurance Company Ltd., a UK insurer acquired by XL from Winterthur Swiss Insurance Company in July 2001.

"However, this policy was not assumed by XL as part of the acquisition and is the subject of indemnification and reinsurance protection from Winterthur Swiss Insurance Company and one of its subsidiaries." XL stated separately that it has completed its review of financial guaranty, weather risk trading and investment exposures to Enron and believes it has only minimal exposures in these areas.

The company also said: "XL is continuing to monitor potential exposures to Enron from its property and casualty insurance and reinsurance businesses." Bermuda insurance giant ACE Ltd also reported that its exposure to Enron's losses will not have a significant impact on the business.

ACE said it would not normally comment comment on individual insurance exposures.

But in light of recent media reports concerning insurer exposure to Enron losses, the company stated it has reviewed its potential exposures to Enron, including directors and officers liability, financial guaranty, weather risk trading and other exposures, and believes that such exposures would not significantly impact future operating results.

For more information on Everest Re: www.everestre.com