Bermuda-based Stirling Cooke Brown Holdings Ltd has seen its net loss more than double for the first quarter of 2002, due to the knock-on effects of last year's poor results and litigation.

The company reported a net loss from continuing operations of $3.5 million for the quarter, compared to a net loss of $1.5 million for the same period in 2001.

The company also reported a diluted net loss from continuing operations of $0.37 per share for the quarter ended March 31, 2002, compared with diluted net loss per share from continuing operations of $0.16 for the corresponding quarter of 2001.

A release from the company said: "The results for the quarter continued to be affected by factors that adversely impacted the company's results last year.

"The company continued to incur costs pertaining to run-off activities and reinsurance-related disputes in which the company and others are involved, including certain litigation, the unanticipated duration of which has placed a significant strain on the cash resources of the company."

Diluted net loss from all operations of $0.45 per share for the quarter ended March 31, 2002, compared with diluted net loss per share from all operations of $0.20 for the corresponding quarter of 2001.

For the quarter ended March 31, 2002, total revenues from continuing operations were $10.5 million, a decrease of $0.9 million from $11.4 million in the first quarter of 2001.

The company said the decline in revenues from continuing operations in 2002 reflected capacity shortage and margin contraction in the brokerage and programme business segments.

And it added that this decline was partially offset by increased net premiums earned in the insurance segment which had retained more business by reducing the amount of reinsurance purchased for its programmes.

Insurance revenues earned by the company's US-based insurance carrier increased to $6.6 million in the first quarter of 2002, from $5.3 million for the first quarter last year. The increase in insurance segment revenues reflects the increase in net premiums earned.

Gross written premiums decreased due to the decision to discontinue certain loss-making programmes in 2000. Despite the decrease in gross premiums, net premiums written and earned increased as a result of reduced reinsurance ceded.

Insurance costs increased to $6.0 million in the first quarter of 2002, compared to $4.3 million in the first quarter of 2001. The increase in insurance costs was primarily due to the increase in net premiums earned in the Company's US-based insurance carrier.

Stirling Cooke Brown Holdings Limited is a Bermuda holding company, which, through its subsidiaries, provides insurance services and products.