reports.

Continuing a trend started late last year, shares of Bermuda-based insurers and reinsurers are getting pummelled in the stock markets. The trend marks a reversal of fortunes on the markets after years of stellar gains.

Mutual Risk Management Ltd. and Stirling Cooke Brown Holdings Ltd. are two of the most prominent examples in recent weeks of an industry sitting in the doldrums of the market.

The effects of investors' concerns about the state of the sector can be seen in the performance of the Bermuda Insurance Index which tracks the performance of ten companies based on the Island.

Since the index was launched in June last year it has fallen about 45 percent.

The Bermuda Insurance Index Fund, which was launched six weeks after the index, just after stock prices began falling, has also plummeted 26 percent since inception.

The negative returns are worse than that of the industry as a whole. The SNL Insurance Index shows that total returns for all insurers in the 52 weeks to September 24 fell about three percent. Multiline insurers showed a 27 percent gain. But property and casualty insurers suffered a 16 percent decline. The S&P 500 rose 24 percent in the same period.

The fund tracks the Bermuda Insurance Index set up on July 15 last year by the Bermuda Stock Exchange and London's FTSE International. The index tracks the ten companies weighted according to their market capitalisation.

Anne Kast of Kast Investment Management, co-manager of the fund along with Mutual Risk Management, said the whole insurance sector has been "very difficult for investors''.

Mrs. Kast said she was waiting to issue her letter to shareholders until after the Bermuda Angle conference two weeks from now when she would be better able to get a view of the market from the companies and analysts who attend.

"It's obviously a rough market,'' she said.

Stirling Cooke Brown Holdings Ltd. has suffered the fallout from the stock market, being punished for drops in revenue and for suits launched against the company for workers' compensation business involving its subsidiaries.

From a high of $29.50 over one year ago, the stock has fallen to about $1 3/8.

Insurers' shares take a beating Other insurers' dismal stock performance is in general an indication of investor concerns about increased competition, high claims, and a recent spate of catastrophes.

Many of the stocks had also peaked in price in July last year. The index is made up of ACE Ltd., Exel Ltd., Annuity & Life Re, IPC Re Holdings, LaSalle Re Holdings, Mutual Risk Management, PartnerRe, RenaissanceRe Holdings, Stirling Cooke Brown Holdings, and Terra Nova (Bermuda) Holdings.

Mutual Risk's stock fell about 30 percent on Monday after management warned that third quarter profits were expected to come at 33 to 38 cents a share, below analysts projections of 44 cents a share. Mutual Risk's stock price continued to fall yesterday, going down to about $13.75 from a 52 week high of about $43.25. Yesterday analyst Warburg Dillon Read LLC lowered its target price to $18 to $20 from $48 and lowered its earnings estimates to $1.45 a share from $1.71 for fiscal 1999.

ACE Ltd. and XL Capital Ltd., the two largest companies on the index, have also been hurt over the last year. ACE's stock price has fallen from a high of $37.75 in July 1998 to a low of about $17.50 yesterday, a 54 percent fall and below a book value of $20.29 per share.

XL has gone from a high of $81.50 in August 1998 to about $43.25 yesterday.

LaSalle has trended downward from a high of $36 last year to about $14 yesterday. According to Yahoo! financial data the company's book value is $24.61 a share. The company hit a 52 week low of $11.6 in April this year.

PartnerRe went from a high of $50 in July to a low of $34 in October, rose again to about $45 before falling to a current $34.

Relative newcomer Annuity & Life Re has gone from a high of $27 in January this year to about $21.19. IPC Holdings, Ltd. stock price has fallen from a high of $27.75 in July last year to about $19.50. RenaissanceRe has gone from a high of about $47 in August 1998 to a current price of about $35.25. The company recovered from a low of $30 in May this year.

Terra Nova Bermuda Holdings Ltd. has been the lone exception to the market's disillusion with Bermuda insurance stocks. The company's share price hit a low of $21.25 earlier this year but has since bounced back to $32.

opened at $15, far from the $43.25 of the company's 52 week high.

Anne Kast: `It's obvioulsy a rough market' BUSINESS BUC