HAMILTON, Bermuda (Bloomberg) -- ESG Re Ltd. shares rose as much as 12 percent in the first day of trading on growth prospects for the reinsurance company.

ESG's shares rose 2 to 22 in midafternoon trading of 5.48 million last Friday, after a $180 million initial public offering. Earlier, the stock touched 22 3/8. Hamilton, Bermuda-based ESG, which will offer accident, health, life and special risk reinsurance, plans to stop arranging reinsurance for other companies and start reinsuring for its own account.

Reinsurers assume some of the risk insurance companies take on by writing policies for customers, in exchange for part of the premiums. ESG is benefiting from a continuing need for reinsurance, as well as from the variety of reinsurance it will offer, which lessens its risk from problems in any one industry, analysts said.

"The reinsurance group is really a very solid sector in the marketplace,'' said David Menlow, president of IPO Financial Network. "It has its cycles, but when you're talking about broad-based reinsurance companies, you're really spreading the risk.'' As expected, the company sold 9 million shares at $20 each. ESG's stock sale was sponsored by insurance executive John Head, who has helped create several insurance and reinsurance companies that subsequently held IPOs.

The company also sold 2.7 million shares of stock, totalling $50 million, directly to investors in the US and abroad.

Deutsche Morgan Grenfell and Donaldson, Lufkin & Jenrette Securities Corp.

managed the sale, along with Conning & Co. and Stephens Inc. The shares, trading on the Nasdaq Stock Market under the symbol TEMPA today, will trade under the symbol ESREF starting next week.

ESG shares could have done even better in a healthier IPO market, analysts said.

The US IPO market has struggled since late October, when tumbles in stock markets worldwide amid financial turmoil in Asia led to a seesawing U.S. stock market. The market volatility has made investors wary about buying shares in untried companies, analysts said.

For a few weeks following a historic 554-point decline in the Dow Jones Industrial Average on October 27, the number of new IPOs in the US stayed high, as a slew of companies who had filed in better times brought their shares to market. Companies and underwriters were trying to get IPOs done before mid- December, when the IPO market slows down for the holidays.

The volume and share pricing, though, is showing the effects of slowing demand for shares, analysts said. Fewer than half of the more than 25 IPOs slated for this week actually came to market, and several of those that did priced at the bottom of or below their expected range.

"When the broader markets fall as much as they have, it's going to give underwriters and companies second thoughts about trying to do an IPO,'' said Ryan Jacob, director of research at IPO Value Monitor. "Why try to sell shares in a company at fire-sale prices?'' Osiris Therapeutics Inc. withdrew its IPO and Ameristeel Corp. said it wouldn't go forward with its IPO right now, both citing unfavorable market conditions. Some of the IPOs that didn't price this week have been postponed indefinitely, while others are now on next week's schedule, including those for 800 Travel Systems Inc., Combichem Inc. and J.G. Wentworth & Co.

That doesn't ensure they'll actually go through next week -- or at all.

"It's scheduled to be heavy, but this week was scheduled to be heavy as well, and it hasn't been,'' said Ken Fleming, an analyst at Renaissance Capital Corp. in Greenwich, Connecticut.

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