Bermuda-registered ESG Re Limited has announced losses of $51.2 million for 2002, a year which also saw it de-listed from the New York Stock Exchange due to its failure to make timely filings.

The company had a fourth quarter loss of $24.7 million compared to a net loss of $6.1 million last year.

ESG Re attributed its losses to multiple factors including a technical underwriting loss of $16.4 million and a dramatic increase in administrative costs to $42.1. The company's statement said there was a legacy of underwriting losses up to $24 million stemming from one individual in their German office which has now closed.

Administration costs included an increase to legal reserves of $6.8 million to cover arbitration and litigation developments.

The company revealed that the resignation of Deloitte and Touche as auditors and the necessity of restating its accounts led to increase in audit, legal fees and expenses of approximately $2.0 million.

ESG Re also lost $5.1 million as a result of a write-off of deferred acquisition costs on an Australian contract that was terminated by a client solely due to the rating downgrade in November resulting from the resignation of Deloitte & Touche. ESG has now released restated results for the year ended December 31, 2001.

The company had already revised these results once due to discrepancies with their Foreign Currency Translation account, and has now released further amendments relating to the accounting treatment for a co-reinsurance contract entered into with ACE INA Overseas Insurance Company Ltd. (ACE).

All the amounts for the ACE contract have remained the same and the changes mainly relate to presentation of the information in the accounts.

The company was able to released further details of the foreign currency translation adjustments, which had been misstated by $3,992,000.

In assessing 2002, Alasdair Davis, CEO, stated that: "We have now completed the implementation and where necessary the reimplementation of the infrastructure systems and processes to support the company.

"Working through the legacy issues has taken one year longer than we originally anticipated. We are at a point where the open treaties for the early underwriting years are less than two dozen.

"We now feel we are at a point where the remaining legacy liabilities are known and quantified. Treaty matters in litigation and/or arbitration are significantly fewer in number than this time one year ago."

Looking forward, Mr. Davis continued by saying that: "Our focus in 2003 is in the production and retention of business that meets not only our profit criteria but also our requirements for win/win business partnerships." Mr. Davis took the opportunity to thank both our current clients and employees for standing firm with the company through the last several difficult months.

He commented that our balance sheet is solid and our capital is sufficient for the business we want to write in 2003.

The plan is to achieve a breakeven financial result in 2003 and we are on course to meet this objective for the year."

The president of SC Fundamental ICC, which owns a 10.6 percent interest in ESG has been appointed to the ESG board.

Mr. Peter Collery will be a non-executive director of ESG.