1999.

ESG said early indications are that 1999 premium growth will exceed original expectations, the company said expenses required to achieve the desired premium growth will affect earnings in the short term.

The company, which provides medical, personal accident, credit life and disability reinsurance, also said it expected an increase in the overall loss ratio as its North American portfolio takes on a proportionally higher weighting than in 1998.

The company also said current low interest rates will have a negative effect on investment income.

Wall Street expects the company to post $1.86 per share in 1999, according to First Call's forecast.

As a result, ESG -- founded by insurance investor John Head -- said it continued to stress its underwriting profitability.

For the third quarter, the company posted a net income of $4 million, or $0.29 per diluted share, compared with a net loss of $310,000, or $1.72 per share from a year earlier.

Net operating results, excluding realised investment gains, was $0.26 per share, in line with Wall Street estimates, according to First Call Corp.

Despite the current market conditions, ESG said it was encouraged by the outlook for premium growth next year.

"The potential volume and quality of 1999 business that we see is encouraging,'' it said. "We believe our action plans for next year will establish a solid foundation to support accelerated growth and progress toward ESG's goal of being a leader in the global reinsurance markets.''