to emerge -- and there is good news and bad news.

The good news is that the end of the soft market may be in sight, with some industry segments beginning to report firming.

The bad news is that, until the soft market ends, pressure on the bottom line remains intense.

Third-quarter results at Bermuda-based Mutual Risk Management Ltd. confirm the trend: a decline in operating income for the quarter, despite increased fee income.

Operating income for the quarter ended September 30, 1999 was $15.3 million, down 10 percent on the same period last year. With fewer shares in issue this year, operating income per share fell less far, to 35 cents per share from 37 cents a year earlier for the third quarter.

For the first nine months of 1999, operating income, excluding provisions for losses on terminated programmes, amounted to $53.4 million or $1.15 per diluted share, as compared to $49.1 million or $1.08 per diluted share in 1998, an increase of six percent.

The Company established a provision related to net losses incurred on a number of terminated programmes of $8 million net of tax, or $0.18 per diluted share, during the third quarter. This resulted in a $12.3 million increase in losses and loss expenses incurred during the quarter, offset by a $4.3 million reduction in income taxes.

In a joint statement, Robert A. Mulderig, MRM's chairman and chief executive officer, and John Kessock, Jr., the company's president, said: "This is the first quarter in which we have fallen short of analysts' estimates in the 33 quarters since we became a public company in 199l.

"The shortfall in earnings was caused by slower growth and lower margins in our programme business segment during the quarter. However, we still achieved growth in fees of nine percent for the quarter and 18 percent for the first nine months of 1999, and a return on equity of 18 percent, excluding the provisions.

"After 12 years of declining prices in the commercial property casualty insurance market, prices are now stabilising and even increasing at modest rates. We expect to see more significant rate increases in the fourth quarter and into 2000. We believe that firming prices, especially in the workers' compensation line, will enable the company to return to its historic rates of profitable growth and return on equity.''