Analysts said the decline has been triggered by interest rate increases, and the "tough winter'' of catastrophes.

Rises in interest rates have been blamed for a general fall in US stock prices. The Dow Industrial Index dropped 72 points yesterday as it declined for the fifth straight day.

US analysts interviewed yesterday have mixed views about prospects for Bermuda's property catastrophe sector. One New York stock watcher, who declined to be named, was upbeat about the reinsurers, particularly Partner Re.

Mr. Ira Malis, managing director of Alex Brown and Son Inc., a US insurance research group, said property catastrophe stocks like Mid Ocean and Partner Re have stabilised.

But he said the question of how long the market will stay strong hangs over these companies. There is concern about the impact of the recent earthquakes on reinsurers, he said.

Mid Ocean stock closed yesterday at $27.375 -- up from its low for the year of $26, but far from its high last October of $34.25. Partner Re closed at $19.625, 25 cents above its low.

Meanwhile, Bermuda's catastrophe reinsurers are confident that the Los Angeles earthquake will not have a major affect on their results.

IPC Re senior vice president Mr. James Bryce said that for most Bermuda reinsurers, including IPC Re, the earthquake loss, will be less than their earned premiums for the first quarter.

Mid Ocean Re estimates about $37 million in losses from the earthquake. Global Capital Re and Partner Re estimate respective losses of almost $12 million and more than $10 million.

The emergence of negative press reports, branding Bermuda's high profile reinsurers as "risky'' is said by Mr. Larry Doyle of Global Capital Re to originate from the London market.

"Our financial position is stronger than London's. Bermuda has more capacity than London already. They should be careful what they say.'' US rating agency Standard and Poor is predicting that catastrophe reinsurance shortage is over, and prices for the coverage have stabilised.

"It is unlikely that rates will soften much over the next year or so,'' said Standard & Poor's.

As for other Bermuda insurance stock, Mr. Malis said: "In general, they have not been bad over the last month or two. ACE is picking up in a bear market.'' ACE stock is now trading at $26.75 -- down from $28.50 in early February. In early October, it was trading at $331 .

"Interest rates have been rising,'' said Mr. Malis. "The yield on 30-year bonds has risen from 5.78 on October 15 to seven percent now. That's a big move, and when that happens investors get out of insurance stocks.

"Most trading is close to book value, and will not go below this unless there is a real problem. The stock is outperforming a bad market.'' However, Mr. Michael Lewis, senior insurance analyst at Dean Witter Reynolds, also cited rising interest rates, adding: "The property catastrophe stocks have been hurt by reduced earning expectations, because of the ongoing catastrophe losses, and the fact that companies have gone into a situation of retaining more of the risk. Earnings are more volatile, which translates into lower share prices.

"In the last two months, the situation has intensified and pressures have mounted on the marketplace. It is hard to know whether this will continue.'' One analyst was particularly bullish about the property catastrophe stock, which in his opinion "will stay strong.''.