new Bermuda-based reinsurer, ESG Re Ltd. filing for an $160-million initial public offering.

ESG filed with the US Securities and Exchange Commission to sell eight million common shares at $20 each. At this price, ESG will have an initial market value of about $232 million.

ESG, the parent company for European Specialty Group Holding AG, plans to offer accident, health, life and special risk reinsurance to insurers and selected reinsurers on a worldwide basis.

However, the company until now has acted through a subsidiary as an agent of sorts for other reinsurance companies. The ESG subsidiary would form pools among reinsurers and then underwrite policies on their behalf.

While ESG didn't retain any of the risk under these reinsurance arrangements, the company handled tasks such as risk analysis, pricing, claims management and loss reserve estimation for its partners.

Companies who participated in reinsurance pools arranged by ESG include Swiss Re Life & Health/The Mercantile and General Life Reinsurance Co. Ltd.

After the stock sale, ESG plans to venture out on its own. The company will stop arranging reinsurance for other companies and start reinsuring for its own account.

"The company believes that the skills which have allowed it to develop a successful management business are the same skills required to operate a successful reinsurance company,'' ESG said in Monday's SEC filing.

Net premiums written by ESG, primarily for its reinsurance partners, totaled $62.7 million in 1996, up from $57.6 million in 1995. Net losses and expenses from settling claims totaled $34.7 million in 1996 and $25.4 million in 1995.

Reinsurers help insurance companies shoulder some of the risk that they incur by writing policies for customers. The reinsurers agree to assume some of this risk in exchange for a portion of the premiums.

Mr. Head has helped create several insurance and reinsurance companies that subsequently held IPOs, including Sphere Drake Holdings Ltd., PartnerRe Ltd., and Integon Corp., according to analysts. These offerings have had mixed success.

He was the largest single shareholder of Sphere Drake with some 6.9 percent of stock valued at $13 million last year when he left the board over a management dispute.

The Bermuda insurer and reinsurer has been involved in heavily reserving for losses incurred in discontinued operations and re-focusing its underwriting direction.

----BLOOMBERG John Head BUSINESS BUC