Management promises to change the fortunes of the struggling Bermuda insurance broker Stirling Cooke Brown Holdings Ltd. have yet to show fruit, with the company's profits continuing to fall for the second quarter of 2001.

The company reported a total net loss, including losses from discontinued operations, of $2.3 million, or ($0.24) per diluted share, for the second quarter 2001, compared with a total net loss of $2.2 million, or ($0.23) per diluted share, for the second quarter of 2000.

The company has over the past few years faced a number of law suits which have drained capital and tarnished the company's reputation.

Over the last two years Stirling Cooke changed its management and has attempted to improve the company's image, including considering changing its name to Atlantic Star Insurance.

In May, 2000, Stephen Crane, president, chairman and chief executive officer predicted that by May, 2001, the company would once again be profitable.

But in May this year its net loss had almost doubled to $1.9 million for the first quarter of 2001 compared to a net loss of $1 million in the first quarter of 2000.

And yesterday Stirling Cooke reported a net loss from continuing operations of $1.1 million for the second quarter, or ($0.12) per diluted share, compared with a $1.8 million net loss from continuing operations for the second quarter of 2000, or ($0.19) per diluted share.

In its second quarter report, the company noted that although results from continuing operations improved in the second quarter, especially in the insurance and programme segments, Stirling Cooke continue to be burdened by the ongoing costs, primarily legal, of reinsurance disputes.

The company said the US workers' compensation insurance market, in which Stirling Cooke conducts most of its business, began to show signs of improved pricing in 2000, and this trend has continued in 2001.

However, the company experienced reduced revenue in its brokerage segment because of significantly diminished capacity in reinsurance markets, and in its programme segment because of its initiative to impose stricter underwriting discipline, the company said.

Stirling Cooke said it also experienced reduced margins reflecting reinsurance terms in 2000 and, to a lesser extent, in 2001.

The company reported net loss from continuing operations for the first six months of 2001 was $2.6 million, or ($0.28) per diluted share, compared with a net loss from continuing operations of $2.6 million, or ($0.27) per diluted share, for the corresponding period in 2000.

But total revenues from continuing operations were $11.9 million, an increase of $1.9 million from $10.0 million in the second quarter of 2000.

Brokerage segment revenues were down to $1.7 million in the second quarter of 2001, compared to $3.1 million in the second quarter of 2000.

The company said the decrease was primarily the result of reduced business being brokered due to significantly diminished reinsurance capacity for workers' compensation business.

The Company's programme business segment revenues decreased $0.8 million to $3.2 million in the second quarter from $4.0 million in the second quarter of 2000.

This company said the decrease was due to reduced fee margins on programmes and a reduction in program business volume due to management's decision to impose stricter underwriting standards on continuing programmes.

Insurance segment revenues earned by the company's US-based insurance carrier increased by $4.3 million to $6.8 million in the second quarter of 2001, compared to $2.5 million in the second quarter last year.

For the quarter ended June 30, 2001, total expenses from continuing operations, including insurance costs, were $13.3 million, an increase of $0.4 million from expenses of $12.9 million in the same period of 2000.

The company said the reduction of expenses from continuing operations, including insurance costs, reflects the benefits of the restructuring programme begun in previous years, together with a general reduction in administrative costs as a result of reduced business volume.

Insurance costs for the quarter increased to $5.8 million for the second quarter of 2001, compared with $2.8 million in the same period for 2000.

Stirling Cooke is a Bermuda holding company, which, through its subsidiaries, provides insurance services and products. The company provides its range of services and products to unaffiliated insurance and reinsurance companies, insurance agents and insurers. The company is active primarily in the workers' compensation, occupational accident and health and casualty insurance markets through its subsidiaries located in London, Bermuda and the United States.